Life Insurance Trust

Life Insurance Trust

A life insurance trust is considered to be a type of trust that has the power to purchase any life insurance policy on the grantor who starts the trust, the grantor’s spouse, or the beneficiaries of the trust. A life insurance trust owns the life insurance policy and will collect the death proceeds when the grantor dies. The life insurance trust document will classify who the beneficiaries are and how it should be paid out. A life insurance trust is usually put together for estate planning purposes such as a way to provide security for your loved ones after your death and to provide liquidity to your estate so that your debts and other obligations can be taken care of.


There are a few benefits of a life insurance trust that you will want to look at when deciding if a life insurance trust is best for your family and your loved ones. One benefit of a life insurance trust is that it can provide the necessary cash to pay your estate taxes and any other expenses that you might have after you die. A life insurance trust can reduce the estate taxes by taking away the insurance from your estate. A life insurance trust can give you the most control over your life insurance policy and how those proceeds are used within your estate. Finally, a life insurance trust can provide an income to your spouse without having any of the insurance proceeds being included in the spouse’s estate.