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Life insurance can be a flexible estate planning tool

For many in Tennessee, purchasing life insurance is a means of providing for those who will be left behind after the policyholder passes away. Life insurance is an estate planning option that can help replace a lost income or give surviving loved ones a degree of peace of mind when it comes to financial matters. What many people do not know, however, is that some life insurance policies can benefit the policyholder as well.

Estimates suggest that as many as seven out of every ten people will eventually have a need for long-term care. However, only one out of every ten people have purchased long-term care insurance to help cover those expenses. Many people avoid these policies because the benefit is only made available if long-term care becomes necessary. If an individual moves through his or her golden years without the need for long-term care, then the value of the policy is lost.

A solution lies in a certain type of life insurance policy that includes a long-term care rider. If the policyholder eventually needs long-term care, then the death benefit can be accelerated and used to cover some of the cost. If the policyholder does not need long-term care, then the full value of the policy will be paid out to the named beneficiaries.

In this way, some life insurance policies offer the best of both worlds. If long-term care coverage is needed (which is not uncommon as people age,) then the policy can be used for that purpose. If long-term care does not become an issue, then the policy will pay out as intended, and the policyholder's loved ones will receive the value of the insurance policy. That makes this type of life insurance a valuable estate planning tool that Tennessee residents should consider.

Source:, "Integrating Life Insurance Into Estate Planning", May 6, 2016

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