Buying Life Insurance Tips

Don’t get ripped off by life insurance sales people. Knowing the one thing most folks don’t can dramatically lower the cost of term life insurance for you or someone you love. This one tip can literally save you and your loved ones thousands of dollars. Read on to find out what this surprisingly simple tip is and why it works so well.

It’s simple, so simple in fact that many people completely over look it. What is this well kept secret? All you have to do is always have your life insurance policy “Written in Trust”. This may sound technical but it is easy to understand and it’s so easy to organize. And the best thing is that it is so easy you do not even need to speak to an insurance representative.

It is free to have your policy set up this way and it has many benefits. The biggest benefit is the amount of money it will save you and your loved ones. But what does “Written in Trust” Mean?

“Written in Trust” ensures that in the event of a claim, the policy will pay directly to the beneficiaries you name on the policy when you first take it out. If you do not do this, the policy will payout to your legal estate and this inevitably means that the money stays in your solicitor’s hands for some time.

It may take weeks, months and in some cases even years, for loved ones to get any money from a life insurance policy. Yes, that implies legal delays and, of course, your solicitor takes a small cut as well.

Then, if the value of your taxable estate exceeds $150,000, and remember your home can easily account for the lion’s share of the $150,00 limit without much difficulty, your estate will have to pay an Inheritance Tax. This represents 40% of the estate’s taxable value.

So, if your estate has to pay Inheritance Tax and the proceeds of your life policy go to your estate, the taxman gets his hands on 40% of your life policy before your loved ones see a single penny.

In addition to taxes being taken out, many times remaining debt is paid from the insurance benefits. After debt is taken out the family may only have a small amount, if any, of the benefits left over to live on.

Getting your policy “Written in Trust” is a simple way to avoid all of those problems. Then the life insurance company pays out immediately, directly, and totally tax-free, to the persons you have named as the beneficiary on your policy.

All you have to do is tell the online brokerage organizing your policy that you want your policy “Written in Trust” and they will automatically sort it out for you. Since this service is considered to be standard there is no fee.

The advice to have your policy “written in Trust “remains sound even if the policy is designed to pay off your mortgage or other debts. Rather than your estate using the insurance payout to pay off your mortgage, the policy can be written in trust and paid to your partner.

When your partner receives the money, then he or she can pay off the mortgage. The benefit? Well if your taxable estate exceeds the threshold, the mortgage is effectively paid off tax-free. Pretty neat, if we do say so ourselves.