How Do I Incorporate Life Insurance in My Estate Planning?

Life insurance is often overlooked during the estate planning process. However, this is an incredibly important tool to consider. That said, there are different types of life insurance policies, and it is important to properly think through which one is best for your situation. To learn more, continue reading and see how an experienced Woodland Hills life insurance planning attorney at The Law Offices of Yacoba Ann Feldman can guide you in making this decision.

What is the significance of life insurance policies in the estate planning process?

Essentially, life insurance is a contract between you as the policyholder and your insurance company. With this agreement, your insurance company must pay a certain amount of money to your designated beneficiaries once you have passed on. This distribution can either be done via lump-sum payments or regular payments, and they act as an exchange for the premium payments you made while you were alive.

What are the different types of life insurance policies?

In the state of California, there are three recognized types of life insurance policies that you can pick from. They are as follows:

  • Universal life insurance: This policy provides you with lifetime coverage. That said, generally, universal life insurance policies are rather flexible, meaning in many cases, you can actually raise or lower your premium payment or coverage amounts at various points in your life. Importantly, these generally come with higher premium payments than other types of insurance.
  • Term life insurance: This policy is best if you require relief from losing potential income during working years. This is because it can replace lost income. However, the benefits are paid in one lump sum, as opposed to regular payments.
  • Whole life insurance: This policy is considered permanent life insurance, and it is designed to provide lifetime coverage. That said, the premiums are generally higher than term life insurance, and are typically fixed payments with a cash value. The cash value works as a savings component and may accumulate, tax-deferred, over time. This is best if you want to preserve the wealth you plan on transferring to your beneficiaries once you have passed on.

With this being said, it is essential that you select the life insurance policy that is in the best interest of you and your beneficiaries. For assistance with this decision, contact a skilled Woodland Hills, California estate planning attorney today.

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Estate planning is a more urgent matter than you may think. You never know what the future holds. Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.

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