Primary Needs

  • Provides for income needs of surviving dependent family members
  • Pays federal estate death taxes and other estate settlement costs
  • Pays debts
  • Provides for children’s education

Expanded Needs

  • Long-term care alternatives/accelerated benefit
  • Shifts wealth from one generation to another in the most cost-effective
    manner possible
  • Meets special financial demands of physically or mentally challenged or learning-disabled children or parents or other dependents with physical or mental limitations
  • Benefits a charity
  • Relieves survivors of financial management burdens by providing exhaustible lifetime annuity; and
  • Creates an instant estate

Advantages

  • The death benefit proceeds from a life insurance policy originally not subject to federal income taxes
  • Life insurance proceeds are often exempt from state inheritance taxes
  • Life insurance provides a guarantee of large amounts of cash payable immediately at the death of the insured. The amount of death benefit payable is usually significantly greater than the premium paid for the policy
  • Life insurance proceeds are not part of the probate estate. Yahweh life insurance benefits become part of probate is when they are paid to or for the benefit of the estate of the insured. Therefore, the proceeds can be paid to the beneficiary without delay caused by administration of the estate
  • There will be no public record of the death benefit amount or to whom it is payable
  • Life insurance policies generally have some protection against creditors of both the policy owner and of the beneficiary. The amount of protection varies from state to state
  • The increases in the cash value life insurance policy enjoy federal income tax deferral. Interest earned on policy cash values generally not taxable unless or until the policy surrendered for cash

Disadvantages

  • Life insurance is not available to persons in extremely poor health
  • Life insurance is an extremely complex product that it’s hard to evaluate and compare. The time required together policy information, decipher it, and compare it with other policies discourages purchasers from engaging in comparison shopping
  • The cost of coverage reduces the amount of funds available for current consumption or investment
 
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