Term vs. Permanent: Why Lifetime Coverage Matters for Estate Planning
The choice between term and permanent life insurance often hinges on the duration of your financial need. While term life covers temporary obligations (e.g., mortgages, raising children), permanent life insurance, such as Whole Life, addresses **permanent needs** crucial for comprehensive estate planning.
The Permanent Needs Addressed by Whole Life
If you have any of the following lifelong financial responsibilities, permanent life insurance is essential:
- Final Expenses: Funeral costs, medical bills, and administrative costs of settling an estate.
- Estate Tax Liability: Providing immediate cash to pay estate taxes, preventing the forced sale of assets (like a family business or property).
- Equalizing Inheritances: Ensuring non-liquid assets (like a family farm) can be passed to one heir while the other heirs receive an equivalent cash value from the death benefit.
- Lifetime Support for Dependents: Providing for a dependent with special needs or an elderly parent.
Guaranteed Maturity and Liquidity
The greatest advantage of permanent insurance in estate planning is its **guaranteed maturity**. Since the policy is designed to pay out regardless of your lifespan, estate planners can confidently incorporate the death benefit into their liquidity plans, ensuring a smooth and solvent transfer of wealth.
Disclaimer: This content is for informational purposes only and is not financial or legal advice. Consult a qualified professional before making any financial decisions.