I cited a study not too long ago that made it clear that many people pass away these days not having used significant portions of there retirement finances. While this money can be passed on through wills or probate, consider this.

I know that many people in this situation know well ahead of time that they won’t be using that money, and the intent is to pass it along. For three reasons you may want to consider using that pool of money to purchase life insurance.

  1. You can leverage your assets into a larger inheritance. With permanent products like universal life being so affordable and guaranteed these days, buying insurance could very well make more money to leave behind than traditional investments like annuities.
  2. Once you have moved your inheritance into life insurance it avoids all income tax to the heirs.
  3. Life insurance is not subject to probate, so there is no holding up the inheritance and there is no chance that your wishes can be misconstrued.

Bottom line. If you intent is to leave money behind and you’re sure you won’t need it for yourself, consider life insurance as an inheritance vehicle.