Thinking about what to include in your will, how you can use various types of trusts, and what medical directives you want to include in your estate plan are all very important, but you shouldn’t forget about the role insurance plays as well. Many people will use insurance as a key part of their estate and inheritance plans. Not only will medical insurance be an important part, but you must also consider the role life insurance and long-term care insurance will have.
There are two main types of life insurance policies: whole and term. Term life insurance is the type of life insurance that most people think of when they think of life insurance. For this kind of policy you pay a yearly premium and can name a beneficiary who would receive a payout should you die during that year. Whole life insurance also provides for beneficiary payments, but it adds an investment element as well. Whole life insurance is more expensive, but it allows you to develop an investment portfolio and borrow against the portfolio’s worth.
Long-Term Care Insurance
If you believe you might need to one day reside in a nursing home or extended care facility, long-term care insurance is a good option. If you do not want to develop a Medicaid plan or do not believe you will be able to qualify for Medicaid, long-term care insurance can help alleviate the expenses associated with nursing home care. Like other forms of insurance, it is always best to evaluate each long-term care insurance plan in light of your needs and financial abilities.
Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.