ESTATE PLANNING BENEFITS OF LIFE AND HEALTHCARE INSURANCE
Aug 27, 2013
Cohen Law Fact
Life and healthcare insurances are indispensable parts of estate planning. Good health is a common sense investment. Late life illness is a risk for everyone and covering its expenses is a fundamental part of an effective estate plan. Life insurance is a method for caring for others, by providing loved ones with a valuable source of funds for loved ones. It ensures immediate payment of funds without legal proceedings. Life insurance can also be an asset that can provide funds if to the policy owner.
In human terms, estate planning has a decidedly realistic purpose. Life will end for everyone and questions about the wealth and property gained during life will eventually need answers. Health insurance is a method for protecting one’s assets. There is a certainty to the end of life; however, the expenses of a final illness are uncertain. They can consume an estate despite years of careful planning.
The costs and obligations of late life illness are obligations of one’s estate. Health insurance coverage is one of the best available methods for protecting wealth from creditors. Even with careful planning and medical costs can exceed coverage, and illness causes unforeseeable expenses. A debilitating disease, for example, can result in extended and intensive home care. It can drain a previously robust estate.
There is more than one definition of family or marriage. Life insurance is an effective means of providing income to all loved ones. Life insurance proceeds are not subject to creditors of the insured, and it does not require probate.
Life insurance is also an asset that can help the policy owner. Despite one’s best efforts to cover the risks of late life illness and medical expenses, events can exceed available resources. Life insurance is a marketable asset; it has a cash value many times greater than its surrender value. This can be a source of badly needed funds for medical care.
Texas has passed, and other states are considering life insurance settlement laws. The purpose of settlement laws is to apply the proceeds of insurance policy sales to healthcare. These laws correct a policy that required surrender of life insurance policies with no payment to owners or beneficiaries.
The benefits of health and life insurances are substantial and significant. An estate is vulnerable to creditors. Health insurance provides coverage for many risks. While there are typically limits to coverage, the overall impact is favorable to preserving assets in the estate. Life insurance is an asset for beneficiaries, but in recent years has also become an emergency asset for the policy owner.