Economic Crisis May Affect Self-Paying Life Insurance Policies

Some life insurance policies, especially those created in the 1980’s and 1990’s, may not be able to self-pay premiums as expected.  This is due to the high return that was anticipated when they were created and the unexpected trouble in today’s market.  While plans vary, the lower interest rates could mean that a policy owner has to pay out of pocket or pay premiums for a longer duration.

People who use these policies as an estate planning tool, which is often done to specifically provide funds that will pay estate taxes upon death, should check on the health of their policies.

See Arden Dale, Keep Tabs on Insurance that Covers Estate Tax, Wall St. J., May 26, 2009.

Special thanks to Patrick S. Sylvester (Attorney & Counselor at Law, Sylvester Law Firm, PC) for bringing this article to my attention.