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Who Will Be The Owner of the Policy
Life insurance proceeds are
included in the estate of a deceased if he or she has
any “incidents of ownership” in the policy.
Ownership by adult children or an Irrevocable Life Insurance
Trust should be considered if there is an estate tax
problem.
How Much Life Insurance?
This will depend on the need it is fulfilling. Amounts
needed to fund a business transfer or to pay death taxes
may be readily determined.
Calculating the value of a human life to a family is
more difficult Consider these projected total earnings
up to age 6 assuming a 5% annual increase including
inflation.
| Projected Total Earnings to
Age 65 |
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Current Income |
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| Current
Age |
$2,000/Mo |
$4,000/Mo |
$8,000/Mo |
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| Life insurance can provide
for your family if something would happen
to you; pay for your children's college education.
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What Type Of Policy Should
Be Purchased?
A person trained in life insurance can explain the
many different polices available and assist in selecting
the one which best fits your needs.
How Should The Premium Be Paid?
Sometimes the amount of the premium can be paid from
current income, while other times it may be prudent
to reposition other assets so as to be able to acquire
sufficient insurance protection.
If the insured is a business owner or executive, a
corporation may assist in paying premiums through a
split-dollar arrangement. Other times it may be better
to have the corporation own the policy and use the proceeds
to purchase part or all of the owner's interest at death.
Insurance can also be purchased in certain qualified
retirement plans.
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