Get a Term Life Insurance Price Quote Today

If you are fortunate enough to be in the exclusive list of the top 1% of wealthy Americans, it is quite likely that you have worked hard to provide your family with financial security. You probably wish to reduce the burden of estate taxes for your loved ones. Life coverage is an effective way to pay for these taxes, and you probably should look for a term life insurance price quote.

It is recommended to have term coverage. This is the easiest way to pay for estate taxes for estates valued at more than $1 million. The remaining majority of the public can also purchase life coverage for their heirs to protect them from unnecessary expenses. Life coverage has an important role to play in estate planning.

An Unwelcome Surprise

Federal taxes may be levied on heirs to an estate after a person passes away. People who died in the year 2012 have no tax to pay on a sum of $5.12 million distributed between the heirs. For amounts bequeathed beyond this limit there is a tax payable up to the rate of 35%. This can come as a surprise to heirs who are unprepared.

The IRS demands payment just nine months after the death of an individual. The authorities are not concerned whether your estate is tied up in real estate, they are just concerned about their money. Several states have their own inheritance and estate taxes which can compound disappointment among heirs. As you look for a term life insurance price quote, be aware that life coverage is of two types:

  • Term Life Insurance: Or temporary life insurance provides cover for a specified period of time. If you survive the term of the coverage, the benefits expire if the policy is not renewed, which is done in the majority of cases.
  • Permanent Life Insurance: Provides coverage throughout the life of the insured person, provided the premiums are paid regularly.

A term life insurance price quote is more economical than permanent life coverage, at least during the initial period. This makes permanent coverage less attractive. Since premiums for term coverage are pretty low, it is paid quickly and is a good way to solve the problems.

There is, however, one major drawback in term life coverage, states Kevin, an attorney in estate planning and senior law. The drawback is that you are at risk of outliving the term of the coverage. If that happens, you are back to square one.

Enrolling in permanent life coverage to pay for federal and state estate taxes is an age-old technique used in estate planning. This strategy will not suit everyone. According to Kevin, people start looking for a term life insurance price quote when they are already in their 50s or older, with the objective to save estate taxes.

Which term life insurance price quote?

You should be aware of the fact that a term life insurance price quote is affected by your health condition and age. The older you are, the higher the premiums. A person who has to pay a sizeable amount towards premiums will not want to enroll in an insurance plan to pay for estate taxes. Purchasing coverage after fifty will be really expensive and will eat up a good portion of your income. If one is thinking of purchasing permanent coverage, it can be fairly expensive.

How Much to Purchase

The political turmoil this year has added to the uncertainty in estate planning for the year 2013 and beyond. Unless changes are made, the amount of money a person can pass on through their estate, tax-free, will go down to $ 1 million from $ 5.12 million. To make matters worse, the top tax rates will go up from 35% to 55% this year.

Experts agree that the new tax free limit will be $3 million. This is purely an assumption. So which term life insurance price quote and cover should you purchase to ensure that all the estate taxes are covered? To start with, you should project how much you may pay towards estate tax without life coverage. Then find out how much can be paid through the liquidity you have.

Since it is not clear what the limit will be in the coming years, it is better to consult an estate attorney and plan for the different scenarios that may arise.

Tax Tips for the 99%

Even though tax issues ensnare the 1% of the population, life coverage can still be used by anyone in any category to secure the finances of their loved ones. For instance, the estate planning issues that crop up with a second marriage can be easily solved with life coverage, or in business succession plans and blended families.

Kevin talks about the case of one of his clients, a couple with two sons, who owned farm land of hundred acres and a few other assets. One of their kids stays at home, loves farming and takes care of the land religiously. The other kid is a bit irresponsible, he never liked farming and moved to Minnesota.

The couple searched for a term life insurance price quote to have sufficient funds for their Minnesota kid, and they named the farm for the other child. The second objective for purchasing term coverage was to provide financial support to surviving the spouse and to pay the mortgage. Certain rules are applicable only in certain states. In some states inheritance tax is applicable when a person gives money to remote heirs like nephews, nieces, and cousins. However, there is no tax applicable in the case of life insurance. A person who inherits one million dollars and purchases life coverage of same amount will have all his inheritance tax wiped out.

If you have not made plans to pass on your estate to your heirs, remember that a term life insurance price quote and cover can make a huge difference in the lives of your children.  Life insurance will ensure that you can pay for a burial and funeral expenses, and that all your debts are paid in case you meet an untimely death.