When boomers’ babies grow up and move out, it may be tempting for some couples to not renew term life insurance policies. This is a mistake according to the Insurance Information Institute.
“Having life insurance is important for estate planning,” says Dr. Steven Weisbart, senior economist at the Institute. He notes that the estate tax exemption was phased out for 2010, but will be reinstated next year. “Unless Congress passes new laws between now and then, the tax will be reinstated in 2011 for estates of $1 million or more,” he said. “Besides the federal estate tax, many states levy taxes at death and in some cases the threshold is lower than the federal number. If your estate is large enough to be subject to federal and state estate taxes, life insurance can help provide the money to offset these taxes.”