Tag Archive for 'life insurance'

Another Heath Ledger Post – Life Insurance Dispute Settled

In September of 2008 TMZ broke the story about Heath Ledger’s life insurance company draggin their feet on paying out his $10,000,000 policy to his daughter Matilda.  The reasons given were:

  1. Allegations that his death was a suicide rather than accidental
  2. He may have lied on the form where he stated he had never taken any illegal drugs.

Matilda’s attorneys filed suit alleging the insurance company (ReliaStar Life) was acting in bad faith.  According to TMZ this morning, that case has now been settled for an unknown amount.

Financing Your Life Insurance Premiums

This interesting idea comes to us today by Greg Herman-Giddens of The North Carolina Estate Planning Blog.  Greg writes:

Many of us could use more insurance for estate planning  purposes, such as financial security  for loved ones or payment of estate taxes. Most of us also have an unused asset, our insurance capacity. That is the amount of insurance for which we could qualify and is based on the projected value of our assets at life expectancy. For most people, the capacity is unused because of a reluctance to pay hefty insurance premiums.

How do we reach this capacity without bankrupting ourselves:  use the death benefit of the policy itself as the collateral for the loan you would use to pay the premiums.

Greg points out – rightfully so – that there would be no estate tax ramifications of the policy is held in an irrevocable life insurance trust and the life settlement market provides (potentially anyways) an exit strategy to accommodate an unforeseen change in circumstances.

Great post Greg, thanks!.