Life Insurance should be part of a person's estate plan; however in many states where Life Insurance is protected against creditor attack, it can be a great asset protection tool. While there are many different types of life insurance, there are certain types that be give you asset protection and flexibility as well as a cash benefit to your heirs.
There are two basic types of life insurance, term life, in which you pay only for a death benefit, and whole life, in which you pay additional money, which builds up as savings. Exemptions in most states protect at least some of the value of your policy from creditors’ claims. Upon your death, in most states, the proceeds can pass to your beneficiaries free of any claims of your creditors. In some states, property that is purchased with the proceeds of a life insurance policy is also exempt.
Extra asset protection may be provided if you place your insurance policy in an irrevocable life insurance trust. With this type of trust, you transfer either an existing policy or the funds to buy one.
Contact your financial advisor for questions: www.MintcoFinancial.com
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