Last month I shared four valuable benefits of life insurance. Here are four more reasons to own cash-value life insurance:
1. Life insurance is discounted estate tax insurance. Federal estate tax returns on Jan. 1, 2011, because of sunset provisions in previous legislation. The exclusion returns to $1 million, and the maximum rate increases to 55 percent. Americans who were not subject to estate tax now could be. Do you want to pay these taxes with whole dollars or would you prefer a discount instead, using pennies to buy dollars? The answer is obvious.
2. Life insurance is a fully funded contractual will. Even when wills work, they proceed through probate, incurring costs and opening your affairs to the scrutiny of the public. When wills don’t work, your desires can be contested, at great cost, and can even be declared invalid.
Life insurance “wills” have none of these problems and even fully fund your estate for the determined value at the precise time it is needed. Think about this: People surrender other assets and put proceeds into life insurance, which is a fully funded contractual will. Few, if any, surrender life insurance to invest in stocks, bonds or real estate.