Common Uses for Life Insurance Policies

You’ve probably given some thought to how your heirs will be able to use the proceeds from your life insurance, but you might not have considered these specific uses:

• Business Planning
• Gifting to Charities
• Building Wealth for Those You Leave Behind

Other ideas you should consider when making your decision about what type and amount of life insurance you should buy involve legal ramifications. You should involve both your insurance professional and your family attorney.  

For example:

• Who will be the owner of the policy?
• Will the policy become part of my estate, and, if so, can I eliminate that risk?  Is that an important question?
• What about my child owning a policy?  Can I place restrictions on my minor child’s ability to access the funds until he or she reaches a  certain age?
• Should I set up a “trust” to own my policy?
• How should I designate beneficiaries?  For instance, did you know that, in most cases,  “beneficiary designations” trump (override) anything you put in your will?  And what is a “contingent” beneficiary?
• Is it possible to borrow money from my Permanent Life Insurance policy and receive withdrawals without being penalized?
• Can I exchange policies for another without having tax consequences via the 1035 exchange?

The answer to most of these questions is a qualified “yes!”  
Again, you should consult with your insurance professional, your family attorney, and perhaps a professional tax advisor as well.

Want to Learn More?

Read our Life Insurance 101 Safe Money Places guide

Download Guide

LIFE INSURANCE TOPICS

Quick Overview

Different Types

Basic Considerations

Typical Questions

Common Uses

SPEAK WITH A 
​LICENSED AGENT

Everyone’s financial situation is unique and there is NOT a one-size fits all retirement plan. Ask us questions and get real answers. ​

ASK a QUESTION

More Protection Topics

Life insurance

Single Premium Life

Critical Illness

Identity Theft

Email newsletter Signup