Many people think of life insurance as a way to provide an income to their loved ones in the event of an untimely death. However, it can also play an integral part in estate planning. The proceeds of a policy may be used to serve several purposes after you’ve passed away. The following guide will help explain the importance of including one in your estate plan.
What Is Estate Planning?
Estate planning is the process of preparing your estate to be transferred after your passing. This includes your assets, debts, real estate, personal belongings, retirement plans, and insurance policies.
A comprehensive estate plan will consist of various legal documents that outline your final wishes. Depending on your specific objectives, you may include a will, living trust, declaration of a power of attorney, and your advance directives.
How Does Life Insurance Work With Estate Planning?
Including an insurance policy in your estate plans will provide your beneficiaries with funds immediately after your passing to take care of any remaining debts, income taxes, and funeral expenses.
For those with a substantial net worth, estate taxes can be significantly high. Life insurance benefits can help cover those taxes, so family members don’t have to sell assets or use their inheritance to pay for them.
What Types of Life Insurance Should You Consider?
There are two kinds of policies to choose from. A term policy offers coverage for a certain length of time and will only provide benefits if you pass away before it expires.
Permanent life insurance will cover you for the rest of your life as long as the premiums are paid. It also builds cash value that you can borrow against while you’re still living. The kind of policy you select will be based on your age and circumstances.
For help choosing a life insurance policy that will accomplish your unique estate planning goals, turn to Farm Bureau of Mebane-Caudill Agency. For over 20 years, they’ve providing the residents of Alamance County, NC, with reliable coverage solutions at competitive rates. Their team of agents — which include Jonathan Caudill, Alan Wilson, Jay Lee, and Eric Michaels — won the 2018 Readers Choice Award for Best Insurance Company in Mebane by the Mebane Enterprise. They’ll work closely with you to ensure your loved ones are set up for a secure financial future. Call (919) 563-3276 to get a quote, or visit them online to learn more about the products they offer.