What Is An Incident Of Ownership Of Life Insurance?

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One response to “What Is An Incident Of Ownership Of Life Insurance?”

1. 

   July 14, 2013

   Peggy Mace

   An incident of ownership of life insurance is the right of the person holding that title to:

   Change the beneficiary of the policy
   Transfer the ownership of the policy
   Borrow from the policy
   Use the collateral of the policy for a loan
   Modify the policy
   Terminate the policy

   When someone has an incident of ownership in life insurance, the proceeds from the policy can be counted as part of the estate. Some people transfer ownership of their life insurance policies to an Irrevocable Life Insurance Trust to avoid estate taxes.