Estate

What Does Estate Mean?

An estate refers to the total collection of assets and items of value that belong to a person, which are passed on to their beneficiaries upon their death. In the context of insurance, life insurance is commonly used as part of estate planning and can be a significant asset that a decedent leaves to a beneficiary.

Insuranceopedia Explains Estate

Many people purchase life insurance policies to increase the value of the estate they leave to their children, spouses, or other beneficiaries. When estate planning is the goal, buyers often compare life insurance providers on factors like death benefit guarantees and conversion options, since the policy needs to pay out reliably decades after the purchase date. Additionally, life insurance proceeds or the cash value accumulated in the policy can assist beneficiaries in settling the decedent’s affairs. That cash value buildup only happens with certain policy types, so people using life insurance for estate purposes typically choose permanent life insurance instead of term coverage. The payout is often exempt from certain taxes, which makes life insurance even more attractive as a tool for estate planning.