Life Insurance to Meet Your Very Specific Needs
By Ranju Kumar
When most people set out to buy life insurance, they choose either a term or cash-value policy. But policy choices and strategies are much, much more diverse today. Here are some strategies to consider..
L0WERING THE COST OF INSURANCE
*Combination of term and cash-value policies. Buying both types of policies is ideal when an individual or family wants a large amount of coverage and the savings benefit of a cash-value policy, but can't afford the high premiums.
Owning two types of insurance can work for first-time insurance buyers - or when owners of an existing cash-value policy want more coverage, but at an affordable price.
*First-to-die policy. Dual-career couples save 20% in premiums by buying one first-to-die policy, rather than two separate policies.
How it works: Death benefits are paid upon the death of the first spouse.
First-to-die policies can be cash-value or blended policies. Be sure the savings feature is worthwhile for your needs and that the policy's interest rate is favorable.
ESTATE PLANING
Life insurance can protect heirs in the event of death of the breadwinner and can help them pay estate taxes.
*Second-to-die policy. When one spouse dies, federal estate taxes are avoided because of the unlimited marital deduction. The death of the second spouse is another matter, and estate taxes can run as high as 55%. A second-to-die policy is indirectly used to pay the estate taxes due when the second spouse dies.
Important: Neither spouse can own this policy, or enjoy any of the powers of ownership, such as the right to change beneficiaries, The policy must be in the name of an heir or trust, which must also pay the policy's premiums.
*Credit shelter trust. This is to protect the lifetime exclusion of the first spouse to die, which is $1,000,000. A credit shelter trust is often used when an estate exceeds the exclusion.
Strategy: Name the credit shelter trust under your will as the beneficiary of your life insurance, or the surviving spouse may be able to disclaim proceeds into the credit shelter trust. Assets avoid taxes in both spouses' estates and are still available to survivors.
OTHER SITUATIONS
*Cash-value insurance policies offer protection against creditors in many states. Check with your lawyer or accountant. Another way to protect assets from creditors is to have a trust own your cash-value insurance policy. Trusts are untouchable when creditors seek assets.
*Funding divorce commitments. A spouse negotiating for alimony may want to have that covered by a term life insurance policy on the paying spouse. The beneficiary should own the policy to maintain control.
About the author
Ranju is an assistant of Carson Danfield, is an "Under the Radar" Internet Entrepreneur who's been quietly selling various products for the last 8 years.
Want to learn more about Life Insurance? Be sure to see what Carson Danfield reveals at http://info5000.com/INSURANCE/ from http://www.FreeArticlesAndContent.com
|
|
Copy This Article
For FREE!!!
You can use this article and copy it on your own website
for free! All you have to do is make sure the article
is copied with no changes and includes the "About
The Author" text. Also please ensure that all url's
are hyperlinked according. Thank you. |
Link To This Article - And We'll
Link Back To Your Website!
You are more then welcome to link to this article! All
you have to do is copy this webpage address from the
address bar and create a link on your website. Please
use the title of this article for your link text. Please
get in contact once you have linked to this article
and we'll link back to you! Thank you. |
|
|
|
Other great articles from this category...
|
Related Sites
|
|
