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Life insurance can be a necessity for families who do not have enough financial assets to close their estate obligations after death. It is also helpful in providing assets to care for family members who are left behind, and a life insurance trust can guarantee that the money will go where it was intended. The Maryland life insurance policies themselves come in various forms, but there are two basic types.

The first type is whole life insurance or what is sometimes called permanent insurance. The premiums for this type of insurance are more expensive than the other popular type. The reason is that they usually have some type of savings factor, or they could have a cash surrender value.

The other type is term life insurance. This type is much less expensive, as it has no savings elements and it does not have a cash surrender value. It also has an expiration date of when the policy is no longer available, and this date usually coincides with some type of debt being paid in full. This type will create a large death benefit if the owners die early in their careers.

Life insurance can be used to financially support a spouse, provide money for college for children, and to cover a mortgage that spans several years. An irrevocable trust for life insurance can be set up to ensure that the money is spent where it is intended. An independent trustee can be appointed to care for the funds and the needs of the family.

Life insurance policies can be beneficial for anyone who is a breadwinner of a family because, whether it is the husband or the wife, suddenly losing the family breadwinner can be devastating to the family who is left behind. The policies should be included in any discussions with their Maryland lawyer about estate planning so that all the information is available. Also, the attorney can help to advise how to appoint when and where the money can be spent.

Source: theledger.com, "There Are Many Uses for Life Insurance", Chas P. Smith, June 24, 2015

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