Why Use An Irrevocable Life Insurance Trust? 
Why use an irrevocable life insurance trust ? The main reason is to transfer the asset -LRB- life insurance is an asset -RRB- out of the direct ownership of the insured . Why ? While life insurance is income tax free in most all situations , it is not estate tax free when adding up all assets subject to estate taxes . For a person who may have an estate tax liability , an insurance trust makes good sense . Making it irrevocable just clearly makes a line of separation from the policy owner and their other assets . 