(Isstories Editorial):- Houston, Aug 21, 2018 (Issuewire.com) – The Tax Cuts and Jobs Act of 2017 have many Americans reviewing their financial plans, particularly their life-insurance plans. Not long ago, they were purchasing permanent life insurance for reasons other than protecting their family in the event of an unexpected death, using it as an estate-protecting vehicle or to provide income for their loved ones.
Many people have life insurance for diverse reasons so it is important not to take chances when it comes to such an important financial-planning tool, said Jennifer Lang, licensed financial services professional. It is best to consult a financial advisor before making any change to your life insurance.
Many people who are concerned about estate taxes use life insurance as a way of paying these taxes. Major elements of change in the new Estate Tax law states that for deaths occurring between 2018 and 2025, estates that exceed $11.2 million are subject to a 40 percent estate tax at the time of death, increased from $5.6 million previously. For a married couple aggregating their exemptions, an estate exceeding $22.4 million are subject to a 40 percent estate tax at the time of death.
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The new law has doubled the estate tax exemption from $5 million per person to $10 million per person. This means couples can now transfer up to $20 million to their heirs without paying any federal estate taxes. For some, that means reducing the need to have life insurance as part of an estate planning strategy.
Should you reduce your life insurance as a result? asked Lang. Not necessarily. The individual and pass-through tax cuts fade over time and become net tax increases starting in 2027, while the corporate tax cuts are permanent. The higher exemption amount is temporary, so many people who bought life insurance as an estate-planning tool might decide it is best to keep their current policy in effect.
Life insurance is an important financial planning tool and provides important protections for a familys future and personal assets. New laws and changes can be initiated at any time and obtaining a customized life insurance rate quote now provide individuals with a defense against multiple situations that may arise.
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This Press Release was originally published by IssueWire. Read the original article here.