Thrivent Financial for Lutherans Logo
Contact Us
| Site Help | Corporate News | Become a Member 
Free Offers | Chapter Web Sites | Locate Your Financial Representative

 
HomeYour AccountsAnnuitiesInsuranceInvestmentsBankRetirementPlanning: Tools & ServicesAbout UsFraternal ProgramsMembers/ChaptersCareer Center
 Thrivent Builds | The Store | Lutherans Online | Lutheran Heritage | Church Loan Program | Thrivent Magazine | Foundations | Thrivent Financial Fitness Club

  Business Planning
  Charitable Giving
  Death Claim Information
  Education Planning
  Elder Care
  Estate Strategies
  -  Proper Planning
  -  How Property Passes at Death
  -  Wills and Other Documents
  -  Trusts and Their Benefits
  -  Life Insurance as an Asset
  -  New Estate Tax Bill
  -  Farm or Business Owners
  -  Estate Protection Services
  Fee-based Financial Planning
  Life Events
  Planning Services
  Planning Tools
  Seminars
  Tax Information
  Youth and Money
  Education Center
  LOMA's Glossary of Insurance and Financial Services Terms

 

 

Planning: Tools & Services > Estate Strategies > Life Insurance as an Asset
Life Insurance as an Asset

How can life insurance be an estate asset?
Life insurance is unique property in some aspects. Death benefits from your life insurance are generally paid income-tax free to your beneficiaries. However, the proceeds will be subject to estate tax if:
  • The insured is the owner of the insurance. Generally, the owner is named on the contract.
  • The insurance is payable to the executor of the insured's estate
  • The insured retained any "incident of ownership" in the insurance contract. This may include the right to change the beneficiary or to surrender or cancel the contract.

How to minimize estate taxes on life insurance
You can generally reduce the possibility of existing life insurance policies being subject to estate tax through a transfer of ownership to another person or to an irrevocable trust. You must live three full years after the gift completion date to place the insurance outside your estate for estate tax purposes. Then, your insurance proceeds usually can escape estate taxation.

If the purpose for new life insurance is in planning to protect your estate, it could be purchased and owned by a relative or by an irrevocable trust. Estate taxation can then be avoided on the death proceeds from the very beginning.

Important: Anyone attempting to give away the ownership of his or her life insurance should seek competent legal or tax advice before the gift is made. Possible gift tax consequences could result.

 

 
   Page Settings
 Adjust Text Size:
A A A A
Printer Friendly

 
 
Related Items
Arrow Seminars
Arrow Life Insurance
Arrow Annuities
Arrow Trust and Investment Services
Arrow Lutheran Community Foundation

   HOME | Site Map | Site Tour | Privacy Policy | Business Continuity Information | What's New On The Web Site | Contact Us | RSS Feeds | Top of Page

Appleton Office:
4321 N. Ballard Road
Appleton, WI 54919-0001 USA
800-THRIVENT
(800-847-4836)
E-mail: mail@thrivent.com

Minneapolis Office:
625 Fourth Avenue S.
Minneapolis, MN 55415-1624 USA
800-THRIVENT
(800-847-4836)
Dalbar Seal of Excellence

Thrivent Financial for Lutherans, Appleton, WI 54919-0001, is authorized to conduct business in all 50 states and the District of Columbia. NAIC # 2938-56014. Products issued by Thrivent Financial for Lutherans are available to applicants who meet membership, insurability, U.S. citizenship and residency requirements. Not all products described are available in all states. Thrivent Financial representatives are licensed insurance agents. Insurance and retirement products, where available, are individual contracts, (not group coverage), and issued by Thrivent Financial for Lutherans. Investment products are offered through Thrivent Investment Management Inc., 625 Fourth Ave. S., Minneapolis, MN 55415-1665, a wholly owned subsidiary of Thrivent Financial for Lutherans. Member FINRA. Member SIPC. Thrivent Financial representatives are registered representatives of Thrivent Investment Management Inc.

Bank products and trust services are offered through Thrivent Financial Bank, 2000 E. Milestone Dr., Appleton, WI 54919-0006 (Member FDIC, Equal Housing Lender), a wholly owned subsidiary of Thrivent Financial for Lutherans. Insurance, investment products, securities, trust, and investment management services and accounts are not deposits, are not FDIC insured, are not insured by any federal government agency, and are not guaranteed by Thrivent Financial Bank. Variable insurance contracts, investment products, trust, and investment management accounts may go down in value.

©1995-2008 Thrivent Financial for Lutherans

This document was last updated on Friday, July 7, 2006 at 12:27 PM