One excellent use for life insurance in the area of estate planning is to cover estate expenses.  Typically, even a small policy can aid here.  The policy pays out on the decedent’s death, and provides a quick lump-sum payment to heirs to fund many expenses, including:

  1. Estate, income, and capital gains taxes
  2. Real estate payments, such as mortgages
  3. Real estate transactions, such as home sales
  4. Commissions for liquidating assets (stocks, bonds, etc.)
  5. Cash to sell or run a business
  6. Cash to pay off business loans or personal debts
  7. Court costs and other legal fees

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