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Life insurance: An option to include in your estate plan

On Behalf of | Dec 2, 2020 | Estate Planning

As you get older, one of the things that you may want to buy is life insurance. This is a type of insurance that can pay out if you pass away. As a part of your estate planning, this can be a helpful tool.

When you pass away, your children or loved ones may have to pay for funeral costs, medical care and other expenses. Life insurance is sent directly to the beneficiary you choose so that they can cover those expenses or use the money to help support themselves.

What kinds of life insurance are there?

There are a few different kinds of life insurance including term life insurance, whole life insurance, universal life insurance and accidental death insurance. Each one helps in different circumstances. For example, term life insurance has a specific length of coverage. If you pass away during that term, then it will pay out to your beneficiaries. If you do not, there is no cash value, so you could outlive the policy.

On the other hand, whole life insurance pays out no matter when you die. Premiums stay the same the entire time you pay. Similarly, universal life insurance covers you for life, but some forms may build cash value that you could borrow against.

As you work on your estate plan, consider talking to your attorney about different types of life insurance and how they could affect your estate. If your goal is to protect your beneficiaries, then having life insurance is one way to do that. Your attorney can help you understand this kind of insurance if you’re interested in adding it to your estate.