If you share your estate with charity, it will usually reduce your estate tax bill. Direct bequests to charity are generally fully deductible for estate tax purposes. Therefore, if you leave your entire estate to charity, you should not owe estate taxes. The lost earning power resulting from your death can have a devastating effect on your family s lifestyle. Life insurance can help ease that burden by providing a sum of cash to your heirs which can be invested and drawn upon as needed.
Insurance is sometimes the best solution for liquidity problems.
Estates are often cash poor if they are comprised primarily of assets such as closely held business interests, real estate or collectibles. Your heirs may need a sizeable amount of cash to pay the administrative and tax liabilities on your estate. And the assets in your estate may be difficult to sell or, for personal reasons, you may not want them sold. Life insurance can help preserve your estate by providing your heirs with the cash they need to pay the estate taxes, administrative costs and funeral expenses relating to your death. Insurance can be an excellent vehicle for equalizing distribution of your estate among heirs.