Just remember also that most of the time with FE you're not going to make the beneficiary "To the Estate of" anyway. There will be another person who is not part of the estate recieving the death benefit. So it won't be going throught the estate or probate at all.
Why Do So Many Agents Want to Sell Final Expense?
- Thread starter dgoldenz
- Start date
Just remember also that most of the time with FE you're not going to make the beneficiary "To the Estate of" anyway. There will be another person who is not part of the estate recieving the death benefit. So it won't be going throught the estate or probate at all.
Taxation isn't usually an issue with FE policies, since the estate values are usually rather low... but the beneficiary is never taxed... if the insured is the OWNER of the policy, then the death benefit is also included in their taxable estate value...
Again, taxes are usually not the issue with most FE clients... it is all about paying for the whole in the ground and getting the dirt back in the whole, without financial burden to the heirs.
- 7,790
Huh? Does that mean put the whole corpse in the hole and cover the whole hole with dirt?
- 1,802
As sportsnut said, and like I have tried to say. It is always considered a part of the estate; providing that the insurED is the owner. It does not matter if the benny is "to the estate of" or not. I am not asking for you to believe me, do your own checking, and then write back in. The only way this can be avoided is to use an ILIT.
I understand that with FE policies you generally will not have to deal with this issue, and if you would read a past post of mine on this thread you will see I have already acknowledged that. What I was saying is that a broad statement like the one made is not CORRECT. Feel free to try and correct me, but next time show factual evidence. I would suggest the IRS's website, if you still do not agree with them, then that is between you and the IRS.
Once life insurance benefits are factored in with retirement accounts and property, many seemingly modest households easily surpass the estate tax exemption amount. A common misconception is that life insurance proceeds aren't subject to tax. While it is true that insurance money isn't subject to income tax, it is subject to estate tax, and any life insurance payoff will be added to your estate. If you know you are going to buy a sizable amount of life insurance, you might be best served by purchasing it within an Irrevocable Life Insurance Trust, or ILIT. "A lot of people don't understand life insurance," says Edward Gjertsen, vice president of Mack Investment Securities. "Let's say I have $1 million on my life in life insurance. My wife and I both die in a car wreck, that $1 million of life insurance gets added to my estate. Let's say I had a $2 million estate. The additional $1 million throws me over the limit and my estate is levied 45 percent in taxes. My kids just lost $450,000 because I didn't plan correctly."
As with other trusts, there's some upkeep during the life of the trust. "The trust owns the life insurance and generally the family gifts money to the trust to pay the life insurance (premiums), and that gets it out of their estate," says Curtis Chen of the Chen Financial Group in Belmont, Calif.
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Huh? Does that mean put the whole corpse in the hole and cover the whole hole with dirt?
You busted my azz Arnguy; squarely... and to think that when I was in the 4th grade, I was hands down the spelling king. Of course it has been a dang long time ago since the 4th grade...
I'll try to do better....
Why do agents sell FE? Because people want to have FE policies.
Does it always make sense to buy a FE policy? Maybe not. But to me it makes no sense to buy a 60" tv, but people do it everyday.
Don't try to get too logical with it, it's emotion, people want to have that $15,000 policy when they die.
Does it always make sense to buy a FE policy? Maybe not. But to me it makes no sense to buy a 60" tv, but people do it everyday.
Don't try to get too logical with it, it's emotion, people want to have that $15,000 policy when they die.
G
Guest
Guest
- 2,103
+1Amen brother...
Yes, thanks for the clarification. I should have made that a bit clearer, but I was trying to hold true to the subject which is FE. I was also coming from my own personal point of view where I have never sold an FE policy to someone who has an estate value worth mentioning that, but there is always the exception to the rule.
- 7,790
You busted my azz Arnguy; squarely... and to think that when I was in the 4th grade, I was hands down the spelling king. Of course it has been a dang long time ago since the 4th grade...
I'll try to do better....
No offense intended. I just have to keep you on your toes to live up to your potential, Sportsnut! I am a fan of yours and know you are more erudite than your ocassional lapses in spelling would indicate. Once in a while I can even catch Moonlight & Margaritas, but there are some posters I don't bother with because it is useless and hopeless.
BTW, I don't mean you, Chumps, because you use spellcheck and other marvelous technology for composing pristine prose.
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