Multi-Uses of Life Insurance in the Estate Plan

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Life insurance can be an important part of your estate plan and can be utilized in many different ways. For example, if your estate is subject to estate tax, life insurance provides liquidity for the payment of taxes without necessarily having to sell your assets if you don't have the cash available.

Life insurance can also be helpful if you have a small business with another partner and you want to create cash for either the business or your partner to purchase your share of the business, such as through a buy-sell agreement, which then provides cash for your family. Life insurance with a buy-sell agreement enables the business to hopefully continue.

And, of course, life insurance provides income replacement and cash for your spouse and kids in the event of your death for payment of bills and maintenance of a lifestyle.

A good estate plan is more than just a will or a trust, but also may include life insurance for various purposes.

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