I am working with a client on two life insurance policies totaling over $10 million in death benefit and when we conferred with his accountant today on ownership questions I ran into a refreshing attitude.

I have voiced my opinion more than once in this forum concerning the seeming lack of understanding about life insurance from accountants, financial planners and estate tax attorneys. There seems to be this common understanding with all of them that of course their client will live long enough and not have any health changes while they take their sweet time researching this and that and taking months to create trusts that really take days to create.

The problem is that their understanding doesn’t always work out and families are left with no life insurance in force, waiting on a plan or an opinion or a trust.

Today was different though. As we talked it became clear that two trusts would need to be created. At this point I was primed to chime in with the idea that it is best to get started on the life insurance applications and work on the trusts at the same time. After all, a family that receives $10 million in life insurance proceeds without a trust has an estate issue that they will need to be taken care of in the absence of an irrevocable life insurance trust. If that same family waits for the trust before starting on the insurance they might very well find themselves not needing a trust anymore if a premature death robs them of the $10 million in income replacement insurance.

It really was like out of a fog somewhere when this accountant spoke up and said he wanted me to start on the life insurance today, that “having the life insurance didn’t answer all the questions, but it did answer 90% of them. It protected the family”.

How fortunate this client is to have a trusted adviser who has their priorities straight.

Bottom line. In force life insurance is the only kind that takes care of your family. Putting it in force should trump all other planning. As a friend of mine told me once, “life insurance with no plan beats a plan with no life insurance….every time.”

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