Tax-deferred protection and accumulation
Protect them from income tax
Your life insurance policy can help protect your beneficiaries from income tax.Since the death benefit of your life insurance policy is not treated as income, your beneficiaries probably won’t have to pay income tax on it.
However, estate taxes are a different matter.
Reduce or eliminate their tax burden
An irrevocable life insurance trust can help your loved ones reduce or avoid estate taxes. Trusts also give your heirs access to money right away, usually within a month. This enables them to pay for final expenses, taxes and any debts while the estate settles.