How can life insurance pay estate taxes?
Life insurance proceeds can pay estate taxes and other expenses in settling an estate. Annual premiums used to purchase life insurance to pay estate taxes can provide a large payoff for low premiums. A major financial obligation of an estate can be estate taxes. Federal estate taxes must be paid within nine months of the date of death. Estate taxes can be substantial, currently as high as 45% of the taxable estate. Life insurance can provide the liquidity needed to pay the tax. 30.
