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Changes in estate planning needs
Jack and Mary were concerned about estate taxes. They opted to purchase life insurance to hedge against costly estate taxes. Their goals was to buy a life insurance policy, pay the premiums over time, and use the death benefit to pay the estate taxes upon their death without passing on burdensome estate taxes to their heirs.
Throughout the years laws at the national level have raised the threshold and exemptions with regards to taxes for estates, meaning many people bought too much insurance and are now over-insured. With the help of an advisor, Jack and Mary should revisit their policy (ies) to see if they can’t divest some of the funds, while still leaving enough in place to cover their estate taxes.
Are there more attractive alternatives than to lapse or surrender a policy for Jack and Mary? Very likely. What steps should they take next?