Best Life Insurance Companies That Offer Policies That Can Be Inserted Into a Trust (2024)

If you have young children, or if you are working toward estate planning, you may be interested in life insurance companies that offer policies that can be inserted into a trust.

For many people, funding a trust with a life insurance policy is a great way to care for and ultimately provide assets that will be used or managed after the insured person’s death.

There are many life insurance trust samples online to provide an idea of what funding a trust with a life insurance policy might entail. And plenty of life insurance companies allow for policies to be inserted into trusts.

Since you may be interested in countless types of trusts, it’s important to understand what you want before you start your search for life insurance companies that offer policies that can be inserted into a trust.

As you search online for the best life insurance policies that can be inserted into a trust, you can use our free tool above to compare policies and rates from top companies in your area.

What life insurance companies offer policies that can be inserted into a trust?

It is possible to fund a trust with your life insurance policy with virtually any life insurance company that can do business in your state.

Some of the most popular life insurance companies with which you may be able to insert a policy into a trust include:

• Northwestern Mutual
• Haven Life
• State Farm
• Pacific Life
• Principal
• Banner Life
• Guardian Life
• Nationwide
• Primerica
• MassMutual
• New York Life
• Allstate
• John Hancock
• Prudential
• Mutual of Omaha
• Protective

While there may be some life insurance companies that don’t offer policies that can be inserted into a trust, most companies will allow for this sort of policy use.

While most life insurance policies can be inserted into a trust, it is important for you to know how to set up your trust to ensure it works just as it should.

How do I set up a trust for life insurance?

All trusts you can purchase are either revocable or irrevocable. Irrevocable life insurance trust samples typically include benefits that relate to federal or state level inheritance taxes.

Revocable trusts are much more common. A revocable trust can typically avoid probate and is also adjustable by the trust’s grantor.

If you have children who are minors, using a term life insurance policy to fund a trust is a simple and fairly inexpensive way to make sure your children are cared for if you pass away.

If you are curious to learn what term life insurance is and how it could help you when considering creating a trust, you can do some research online to figure out if this is the type of policy you want.

In this scenario, the parents of the minor children would purchase life insurance and name the other spouse as the beneficiary, but there would be a revocable living trust as the contingent beneficiary.

The most important thing to remember when using a life insurance policy to fund a trust is to make the beneficiary designations very clear.

Life insurance policies will make a payout to the designated trust once the parents or guardians pass away, and there would be a trustee that managed the trust account and assets on behalf of the children until they were over 18 years old.

Should I use my life insurance policy to fund a trust?

Life insurance policies are a great and hassle-free way to fund a trust, but there are other ways to fund trusts in the U.S.

You can use cash that you have earned to fund a trust, or you can do so with stock investments, interest earned from other accounts, real estate property, and even personal property like valuable collectibles.

But trusts are especially important for young and growing families. If you have young children, you may want to seriously consider setting up a trust.

Trusts allow you to have more flexibility and control when it comes to how the money is allocated in the event of your death.

Young children can especially benefit from you setting up a trust as the beneficiary of your life insurance policy and giving your trustee all the information and regulations on how that trust should work while your child is still a minor.

As you consider the type of life insurance policy you’d want to set up for your trust, you can speak to a financial advisor or do some research online to decide what would work best for you.

And as you search online for the best life insurance policies that can be inserted into a trust, be sure to try our free quote tool below to compare rates from multiple companies.

Case Studies: Best Life Insurance Companies That Offer Policies That Can Be Inserted Into a Trust

Case Study 1: The Smith Family’s Trust for Their Children

John and Emily Smith, a married couple with two young children, decided to set up a trust to ensure their children’s financial well-being in the event of their untimely passing. They purchased a life insurance policy and designated the trust as the beneficiary. In the unfortunate event of their death, the life insurance payout would be directed to the trust.

The appointed trustee would manage the assets and allocate funds for the children’s care and education until they reached adulthood. The Smiths found it convenient and cost-effective to use a life insurance policy to fund their trust, providing them peace of mind regarding their children’s future.

Case Study 2: Amanda’s Charitable Trust

Amanda, a philanthropist passionate about supporting charitable causes, decided to establish a trust to benefit various nonprofit organizations. She opted to fund the trust with a life insurance policy, ensuring a significant financial contribution upon her passing.

By inserting the life insurance policy into the trust, Amanda ensured that her philanthropic goals would be carried out efficiently and that the chosen charities would receive the intended support. The flexibility and control offered by the trust structure, combined with the convenience of a life insurance policy, made it an ideal option for Amanda’s charitable endeavors.

Case Study 3: Mark’s Estate Planning Trust

Mark, a successful business owner with a substantial estate, sought to establish an estate planning trust to protect and distribute his assets according to his wishes. To fund the trust, Mark decided to insert a life insurance policy that would provide a sizable payout upon his death.

By utilizing a life insurance policy in his estate planning, Mark ensured that his loved ones would receive financial support and that his assets would be distributed smoothly and efficiently. The combination of a trust and a life insurance policy offered Mark the flexibility and control he desired for his estate planning goals.