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Wills, Trusts and Life Insurnace Estate Planning

There is a lot to consider when it comes to estate planning and how to integrate life insurance. Without life insurance and an estate plan in place, your heirs are likely to experience many inconveniences ranging from court room battles among family members, arguments over custodial arrangements of minor children, and feuds between family regarding the distribution of your assets and more.

We normally think of an estate plan as a set of instructions that will go into place once we pass. However, having a sound estate plan in place can also offer tremendous assistance should you become incapacitated. In this situation, it is vital to have someone who can make decisions for you as well as handle your personal and medical affairs.

Nearly every complete estate plan includes a life insurance policy. A life insurance policy provides many benefits ranging from income to support your spouse, paying for your children’s education, funding of retirement plans, and providing financial coverage for final expenses.

The amount and type of policy you choose will depend on the size of your estate and assets. For smaller estates, the main goal of a life insurance policy is to ensure the beneficiaries of the policy are well cared for. For larger estates, life insurance can be an essential component of your estate plan. The specific type of life insurance you’ll need for estate planning will depend on your unique goals and requirements. There are many different types of policies at a variety of price levels to consider.

Estate and Wills Insurance: Naming a Beneficiary For Your Policy

Choosing the beneficiary for your life insurance policy is one of the most important factors of planning your estate. It’s most common for either a spouse or a trust to be named as beneficiary. There are advantages and disadvantages to both of these options. For example, death benefits paid to an individual are generally available for use much quicker than those paid to a trust as they do not have to go through the probate process. However, trusts can offer much better tax advantages and can greatly reduce the estate tax your family will have to pay. To determine the best option for your beneficiary, you should talk through your options with an expert who can guide you through the pros and cons of both choices.

Trust Funds and Wills Insurance:


Life insurance trusts provide the policy owner with more control over the funds that are paid from the policy, while also allowing you to reduce (and in some cases eliminate) estate taxes that would otherwise take money away from the funds you were leaving to your heirs.

Insurance trusts can reduce your estate taxes because the Insurance Trust owns the policies for you. This means that your taxable income from the amount of your estate is lower, thereby reducing the taxes you will have to pay.

There are two types of trusts to consider. Revocable and Irrevocable trusts:

Revocable Life Insurance Trust:
This arrangement allows the policy holder to name the trust as a beneficiary. This type of policy is excellent for younger families who need a more affordable but substantial insurance policy.

Irrevocable Life Insurance Trust:
This is an arrangement created to exclude any life insurance proceeds from the estate of the first and surviving spouse.

Estate Planning and Wills Insurance Coverage Options

Whole life insurance plans are typically used for estate planning purposes as they provide a guaranteed pay out as long as the premiums are kept up-to-date. There are a number of coverage options to consider when it comes to who the plan covers and when it pays out:

  • Individual whole life insurance

    If you’re single, or the bulk of your estate is tied up in your name you many want to consider an individual life insurance plan. These whole life plans provide coverage for one individual. This means that once the policyholder passes away the life insurance plan will pay out the death benefit to the designated person.

  • First-to-die whole life insurance

    First-to-die life insurance plans offer joint whole life insurance. This type of group policy pays out once one of the two individuals named on the policy passes away. The death benefit will be paid to the surviving spouse. This can be used as part of the marital reduction to help reduce taxes. These policies can be cheaper than two individual life insurance policies.

  • Second-to-die whole life insurance

    Just like first-to-die policies these second-to-die plans offer whole life coverage for two people. These plans are also known as survivorship life insurance. The difference between this plan and the first-to-die policy is that the second-to-die plan does not pay out until both of the insured parties pass away. This is often the cheapest type of whole life policy for estate planning purposes. It is also a suitable option for wills insurance.

Finding An Affordable Life Insurance For Your Estate Planning Needs

Finding an affordable estate life insurance plan is a key step in your estate planning. IntelliQuote offers an online insurance marketplace where you can compare quotes from the best-rated life insurance companies in the US. Our online quoting system lets you compare quotes in minutes from the comfort of your home. We also have an expert team of licensed insurance agents who are available to discuss your options and help you find the right coverage for your estate planning needs.

It would be best to speak with one of our experienced life insurance specialists who can help you determine which type of policy best meets your needs. Our agents can also give you a personalized quote based on the insurance option you feel is right for you. To speak with our agents, please call 1-800-963-6405 for assistance.