Definition of “estate”, as it applies to life insurance?
As it applies to this sentence: “The advantage of designating multiple levels of beneficiaries is to keep insurance proceeds out of a beneficiary’s ESTATE and to avoid probate.”
I have these definitions of “estate” but do not know which one applies: 1)the property of a deceased person, a bankrupt, etc., viewed as an aggregate 2)The whole of one’s possessions, especially all the property and debts left by one at death 3)equitable estate:: the estate of one that has a beneficial right to property which is legally owned by a trustee or a person regarded at equity as a trustee (as in the case of a use or power) …..plus many more that might apply! Please help me, I am stuck!
For your insurance policy, “estate” means the property of the dead person.
Insurance proceeds are paid to the beneficiary. In the absence of a beneficiary, the proceeds to into the assets the dead person leaves behind — the estate. Thats not a good idea because this may subject the proceeds to estate and inheritance tax. So your insurance company is suggesting what every agent should tell you: specify beneficiaries, who will receive the insurance policy benefit tax free.
define whole life insurance
