How Important Is Life Insurance in Effective Estate Planning?

This post is sponsored and contributed by Comparion Insurance Agency , a Patch Brand Partner.

Personal Finance

How Important Is Life Insurance in Effective Estate Planning? Comparion's agents are here to help you choose the right life insurance policy, so your legacy — and your family — are always protected.

Life insurance is often overlooked when undergoing estate planning. Yet it plays a key role in protecting your legacy and providing for your loved ones.

With Comparion Insurance Agency , you won't have to wonder how your family will be supported after a loss. As a top agency for personalized insurance solutions in the U.S., Comparion's knowledgeable local agents are ready to answer your questions and guide you to the right life insurance coverage.

Below, discover why life insurance is important in estate planning.

What Is Estate Planning and Why Does It Matter?

Estate planning is the process of legally defining how your assets will be distributed after death or in the event of incapacitation. It involves drafting documents including wills, trusts and power of attorney to ensure your family and your assets are protected.

According to the American Bar Association , professionals such as financial planners, attorneys, accountants and life insurance providers may collaborate in your estate planning process. While it is possible to conduct estate planning on your own, having professional support ensures your plan is legally sound and carried out as intended.

If you pass away without an estate plan, your assets could be subject to probate. According to the Department of the Interior , this could lead to a potentially lengthy process where the court determines your heirs and asset distribution. In rare instances where the court doesn't find any heirs, the state could end up in control of your assets.

How Does Life Insurance Help With Estate Planning?

Life insurance offers financial security for your loved ones after your passing, helping them cover expenses that may arise. With a life insurance policy through Comparion , a licensed, local agent will guide you in finding the right coverage from trusted insurer Protective Life, ensuring beneficiaries are financially supported and assets are passed down according to your wishes.

Life insurance offers many benefits in estate planning, including:

Estate tax funding. Estates over a certain threshold may be subject to state and federal estate taxes due within nine months of death. With a life insurance policy, your beneficiaries can avoid paying out of pocket by accessing immediate — and typically income tax-free — cash.

Quicker payments. Life insurance allows beneficiaries to claim the death benefit immediately to help cover expenses like funeral costs or outstanding debts.

Seamless asset distribution. Life insurance policies ensure your assets are distributed how you want them to be, which can reduce potential complications among families.

Better future-preparedness. Having a life insurance policy means you and your family are protected, so you can enjoy life without worrying about the financial future.

If you're in the market for life insurance, Comparion Insurance Agency offers coverage through its partnership with Protective Life, a trusted insurer.

Who Needs a Life Insurance Policy?

Life insurance is necessary for anybody who has dependents, such as a spouse or children, or will have them in the future. Essentially, if your death were to have a financial impact on others, a life insurance policy is strongly advised.

Even if you have a life insurance policy through your employer, it's wise to secure a personal policy, as employer-provided policies are often insufficient for families. This separate coverage ensures you're covered throughout life, regardless of your employment status or location.

You should also consider life insurance if:

You have debts you need to settle. A policy can help prevent your co-signers from incurring your outstanding debts by providing funds to pay them off.

You're a stay-at-home parent. Life insurance can help cover the cost of services that stay-at-home spouses may have been providing, alleviating the financial impact after a loss.

You're an adult child supporting your parents. If your parents are financially incapable of covering end-of-life expenses like medical bills, a life insurance policy can help cover the costs.

You own a small business. A life insurance policy can reduce the likelihood of financial hardship by covering costs to support your business, including share buyouts or the hiring of additional staff to replace you after death.

You want to pay for your end-of-life expenses. Instead of passing your funeral and burial expenses onto others, a life insurance policy can help cover these costs.

Related: Contact Tokiwa Hendricks of Chicago to learn more about Comparion's insurance options and receive a no-obligation quote.

What Types of Life Insurance Are Available?

There are two main types of life insurance: term life insurance permanent life insurance.

Term life insurance is an affordable policy option that offers financial protection for a set time, typically between 10 to 40 years . It provides greater flexibility with fixed premiums and can be tailored to meet your family's needs, with the option to reassess over time as circumstances change. However, the renewal premiums will likely be higher than your initial rate.

Permanent life insurance, as the name suggests, offers lifelong coverage with the potential for tax-advantaged cash value growth. Two common types are whole life and universal life insurance. The former offers fixed rates and guaranteed cash value growth, while the latter offers flexible premiums and death benefits.

For an added cost, life insurance add-ons, known as riders, can provide supplementary coverage to your policy. According to the National Association of Insurance Commissioners , these riders can cover everything from accidental death to long-term care coverage and accelerated death benefits.

To determine the kind of coverage you need, speak to a local Comparion insurance agent . They'll guide you toward the right option to help ensure your estate and your loved ones are protected.

Why Should I Buy Life Insurance Through A Comparion Agent?

With help from a local Comparion agent , you can trust that you're getting the best coverage at the right time and price.

Buying your insurance through Comparion offers many benefits, including:

Greater savings. Comparion's licensed insurance agents, in partnership with Protective Life, have deep industry knowledge. This insight helps them find the right policy for you while securing the best deals and offers.

Personalized support. With over 1,400 local agents nationwide, Comparion's agents tailor coverage to your needs, budget and geographic region. Your insurance agent will also explain your options in a way that's easy to understand.

Peace of mind. Comparion's trusted agents are here to guide, support and advocate for you. In addition to a comprehensive initial policy, your agent can review your coverages over time to ensure you're protected at every stage of your life.

Comparion's insurance offerings don't stop at life insurance, either. You can explore a range of insurance policies to protect you and your family, from vehicle to property insurance and more.