Besides the obvious advantage posed by life insurance – ready cash to cover any and all estate settlement needs at the precise moment it is needed – there are other benefits realized in using life insurance with an estate plan. Your estate planning clients and their professional advisers will appreciate knowing these advantages, too:

1. The event that creates the need – death – automatically creates the funds – permanent life insurance proceeds – which almost always exceed the total premiums paid – giving the client's beneficiaries "discounted dollars" for much needed liquidity.*
2. Insurance proceeds, when payable to a named beneficiary, are not subject to probate, which reduces administration costs.
3. Life insurance proceeds are received free of federal income tax (under current tax laws).
4. By providing the estate with the liquidity needed to pay estate settlement costs, life insurance makes it possible to preserve and distribute other estate assets according to the owner's wishes.
5. Life insurance, typically, is the least expensive way to solve the problem of estate shrinkage, since the dollars needed to meet estate liabilities can be purchased for "pennies on the dollar" each year * and the life insurance proceeds usually exceed the total premiums paid, depending on the insured's age and health.

* Refers to the annual premium as it relates to the death benefit.

Back to Top | Next

Ohio National is not affiliated with, nor does it endorse or sponsor, any particular prospecting, marketing or selling system.

28