Many people arrange for life insurance to be purchased with money that is gifted to their heirs in order to leverage their gift. An annual gift of $10,000 converted to life insurance might purchase over a million dollars worth of second to die life insurance for a husband and wife 60 years of age. Many wealthy clients will take their $1.2 million and "invest" the entire amount in a life insurance program that is in an ILIT. Depending on the age and health of the insured, they might be able to buy a death benefit over 10 times greater than the premium "invested." This would be an excellent example of the substantial leverage that can be achieved through life insurance.

Additional Information on Estate Planning:

Estate Planning Overview
Irrevocable Life Insurance Trusts (ILITS)
Using Ownership and Beneficiary Designations
How to Get Existing Policies Out of my Estate
Can the Three-Year Rule be Avoided?
Second to Die Life (Survivorship) Insurance
Gifts - Overview
Leveraging Your Gifting Program
Grandchildren
Generation Skipping
Living Trusts
Credit Bypass Trust
Charitable Remainder Trusts
Avoid Capital Gains Income for life

Click Here to return to Life Insurance Main