As part of an estate plan, your knowledgeable attorney might recommend different tools to help you accomplish your individual goals and allow for the streamlined transfer of assets to your loved ones. This can mean using something such as life insurance to help support other asset transfers within your overall estate plan.
There are three primary types of life insurance you might consider in this process: group, whole and term. Group insurance is most frequently offered as part of an employee benefits package and therefore, this is extremely convenient.
The challenge, however, is that this kind of insurance will not follow you during a career change and you’ll also want to determine whether the amount of the set policy is really enough to support your family in the event that you pass away.
Whole life insurance is much more expensive because it covers an individual for their entire lifetime while also offering an added benefit in the form of cash value that increases over time. It’s a good idea to have an advisor or insurance agent help you with this process since purchasing whole life can be expensive and confusing. The final kind of insurance that is most popular for people who are thinking about it in the context in their estate plan is term life insurance.
Term life insurance is the most affordable option and it is seen as renting insurance since you get the policy for a period of 10, 15, 20 or 30 years. This enables you to protect your income during your primary working years, for example.