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How Does Life Insurance Fit Into an Estate Plan?

Mockaitis Law Group LLC Oct. 14, 2019

Your estate plan should have many different parts that allow you to fully leave your family in a good place when you die. This plan helps to set up your expectations for your family moving forward after you are no longer here to provide for them. One aspect of a solid estate plan is a good life insurance policy. You have many options in policies in Illinois, so understanding how it will fit into your estate plan can help you to make sure you choose the right policy.

Kiplinger reminds you that your life insurance policy can do many things as part of your estate plan or even apart from your estate plan to help put your estate in a better place. As part of your plan, it is excellent for dependents. It gives you a way to ensure you can provide for them beyond the time you are here on Earth.

It also works nicely as a source of money to tie up your loose ends. It can pay off debts or tax obligations, leaving your other assets untouched and ready to go to your heirs. Along that same line of thinking, you can also use a life insurance policy to pay your final expenses so that money does not have to come out of your estate.

Beyond just its role in the estate plan, you could also use it build up your estate. Some policies have investment value. You may be able to use it for retirement income, so you do not have to dip into other assets. You can also use a life insurance policy to safeguard your business, which, of course, will greatly benefit your heirs. This information is for education and is not legal advice.