Think about Keeping Your Life Insurance
Some families have considered the option of dropping their life insurance due to the changes in estate taxes. However, there are better options available than allowing your coverage to lapse. The amount individuals are allowed to shelter from the estate tax has increased steadily from $675,000 in 2001 to $5 million in 2011 and 2012, causing some families with estates below that to re-examine the need for life insurance.
When deciding whether to keep insurance, think about your health, financial goals and the type of policy you have. However, due to the uncertainty of the estate-tax exemption in the future, it is probably best to maintain coverage for individuals who might be caught if the individual estate-tax exemption drops to $1 million, as it is currently scheduled to do so in 2013. If you cannot afford the cost of the premium, some recommend having heirs cover all or part of the costs. You can also restructure your coverage to make premiums affordable. You can obtain information about this from your insurer. To receive cash, you can surrender a policy to the insurer for a lump sum or sell your policy for a higher amount in a life settlement transaction. A sale or surrender does have tax consequences, so be sure to consult an adviser.
To read more on this article, visit Consider Keeping Life Insurance..
If you have any questions or would like more information, please contact Wood, Atter & Wolf, P.A., in Jacksonville and Ponte Vedra Beach, Florida.
