Life Insurance Considerations for Your Estate Plan
Most people are familiar with the concept of life insurance — if you die while the policy is in effect, your beneficiaries receive a sum of money. You may have purchased life insurance based on a vague idea that it’s a good thing to have, but is it really a necessary part of your estate plan?
When determining whether to buy life insurance, and how much coverage to obtain, or to determine whether to keep paying premiums on an existing policy, consider what need the policy is designed to fulfill in your estate plan.
- Is its purpose to help replace income you were generating for your family? How much will they need in order to maintain their current lifestyle?
- Is its purpose to help pay off a mortgage in the event of your death? What is the balance on the mortgage?
- If you were to die, leaving behind minor dependents, how much money would they need in order to have financial stability until the age of majority? Would they need funds to continue attending a private school, or to attend college?
- Do you have a business interest that will need to be bought out upon your death? Is there a buy-sell agreement that needs to be funded? How much will your interest be worth?
- Upon your death, will your loved ones need access to cash not otherwise available in your estate in order to pay your funeral expenses or make cash gifts as directed by your will or trust?
If you cannot identify a purpose for your life insurance, it may be that a policy is not necessary. If, however, you’ve earmarked the life insurance proceeds in order to meet a specific need upon your death, you’ll want to ensure the amount of insurance is sufficient to meet that need. And of course, if you realize one of the above scenarios may apply to you, you may want to begin shopping for a policy. For assistance determining whether you need a life insurance policy, how much life insurance is necessary, or how to designate the beneficiaries of a life insurance policy, or for assistance with obtaining quotes for a life insurance policy, contact a Hook Law Center attorney today.
Hook Law Center: Kit Kat, can you tell us about the new national mammal?
Kit Kat: Yes, it’s so exciting! President Obama made it official on May 9, 2016—the United States has a national mammal for the first time, and it is the bison. The bison will not replace the eagle, after all the eagle belongs to the bird family. The bison is a wonderful choice, I think. It connotes strength and is unique looking. A mature male can weigh as much as a ton! Surprisingly, these large creatures can run at speeds close to 35 miles per hour.
While bison were once quite numerous, they now are counted in the tens of thousands. Mostly, they live in protected park areas. Naturalist groups backed the designation to protect these remaining herds. Their numbers were reduced by the settling of the West by whites who hunted them for sport, and by the introduction of domestic cattle who had diseases which further reduced their population. The decline of the bison contributed to the destruction of the Native Americans’ way of life on the Great Plains. For centuries, they had followed the bison on their migratory journey searching for food. Bison provided meat and clothing for them, though bison themselves survive on a plant diet.
The word “bison” is of Greek origin, meaning an ox-like animal. French fur trappers had another word for them “boeuffs” (meaning beef). That word, in turn, became Anglicized to “buffalo.” Whatever you call them, they are magnificent creatures who deserve to be protected. (Wikipedia and http://nyti.ms/1T79V5g) (May 9, 2016)
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