Is having life insurance enough of an estate plan?

On Behalf of | Jan 17, 2022 | Estate Planning |

For readers of our blog, they know that estate planning has may facets. It is not just one document or one goal. It is a multiprong plan for one’s life, end-of-life and post-life wishes. Though, some may think that life insurance is all that is needed, which is simply not true.

Life insurance as the sole estate plan

Life insurance should be part of most, if not all, estate plans. Life insurance does not require a will, and it does not require probate. The funds from a life insurance policy flow on death to whoever is named as a beneficiary.

However, it does not necessarily pay for burial or funeral costs, does not contain one’s end-of-life wishes or any other estate planning objective. Plus, an unfortunate issue that occurs to many of us as we age is a loss of mental acuity, which may mean that some will forget to pay their life insurance premiums.

Life insurance recommendations

The traditional purpose of life insurance is to replace the income of person who passes. A good rule of thumb for valuing an appropriate life insurance amount is, therefore, 10 times one’s current salary. For example, if one has a $100,000 yearly salary, their life insurance should be $1,000,000. This is especially true if one has a mortgage, minor children or college-bound children. Even if one has aged out of these concerns, life insurance can be used to specifically cover end-of-life expenses. After all, liquidating accounts or real estate may take too long.


At a minimum, in addition to life insurance, a Dallas-Fort Worth metroplex estate plan should include a will. This is a legal document that sets out all the estates distributions. In other words, who should get what, after one passes. Though, with or without a will, probate court will still be required, which means that an attorney will also likely be required.

Avoiding probate

Like life insurance, there are ways for our Bedford, Texas, readers to avoid probate or at least, lessen the amount of litigation needed. This includes adding transfers on death instructions to accounts, like bank and brokerage accounts. At death, those accounts are transfers to a beneficiary outside of the probate process.