Life Insurance Trust

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Life Insurance Trust A life insurance trust is a legal arrangement that places ownership of a life insurance policy in a trust. This can be done during the insured person's lifetime (revocable life insurance trust) or after their death (irrevocable life insurance trust). The trust is managed by a trustee, who is responsible for paying the premiums on the policy and distributing the death benefit to the beneficiaries when the insured person dies A life insurance trust is an irrevocable, non-amendable trust which is both the owner and beneficiary of one or more life insurance policies. Upon the death of the insured, the trustee invests the insurance proceeds and administers the trust for one or more beneficiaries. Revocable life insurance trust (RLIT). An RLIT is a trust that can be changed or revoked by the grantor at any time. This means that the grantor retains control of the trust and the life insurance policy. RLITs are not as effective as irrevocable life insurance trusts (ILITs) at reducing estate taxes, but they offer more flexibility. Irrevocable life insurance trust (ILIT). An ILIT is a trust that cannot be changed or revoked by the grantor. This means that the grantor gives up control of the trust and the life insurance policy. ILITs are more effective at reducing estate taxes than RLITs, but they offer less flexibility. There are several reasons why someone might want to create a life insurance trust. For example, it can be used to: -Reduce estate taxes -Protect assets from creditors -Provide for a special needs child -Control how the death benefit is distributed. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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