Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Sunday, November 3, 2013

Reasons for Keeping a Life Insurance Policy


What should you do if you have clients who are empty nesters that have a cash-value life insurance policy purchased long ago?  Here are some reasons to hold it instead of cashing out:

  1. Life insurance proceeds can help replenish savings exhausted by retirement spending.
  2. Descendants may like to inherit the tax-free proceeds.
  3. Name a charity as the beneficiary or donate the policy.
  4. Leaving the tax-free death benefit to the beneficiary may make better investment sense than taking out the accumulated cash value.
  5. It may make sense to keep the policy in force, but borrow against the accumulated cash value.

See Kevin McKinley, Five Reasons to Keep a Life Insurance Policy, Wealth Management, Oct. 23, 2013.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.


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