https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ALife_insurance_trust 2026-06-14T14:52:46Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Life_insurance_trust&diff=16725&oldid=prev 2026-03-15T07:33:50Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>📋 &#039;&#039;&#039;Life insurance trust&#039;&#039;&#039; is an irrevocable or revocable trust that owns a [[Definition:Life insurance | life insurance]] policy, ensuring that the [[Definition:Death benefit | death benefit]] proceeds are managed and distributed according to the trust&#039;s terms rather than passing directly to a named [[Definition:Beneficiary | beneficiary]] or flowing through the insured&#039;s estate. Commonly used in estate and wealth-transfer planning, these trusts are most prominent in the United States — where an irrevocable life insurance trust (ILIT) can remove the policy&#039;s proceeds from the insured&#039;s taxable estate — though analogous structures exist in other common-law jurisdictions including the United Kingdom, Hong Kong, and Singapore, often adapted to local trust law and tax codes.<br /> <br /> 🔧 The trust is established by a grantor who either transfers an existing policy into it or has the trustee purchase a new [[Definition:Life insurance policy | life insurance policy]]. A designated trustee — who may be an individual, a bank, or a trust company — owns the policy, pays [[Definition:Premium | premiums]] (often funded by gifts from the grantor), and upon the insured&#039;s death, receives and distributes the proceeds in accordance with the trust instrument. In the U.S. context, the grantor typically cannot retain any &quot;incidents of ownership&quot; over the policy; doing so would defeat the estate-tax benefit. The trust document specifies whether proceeds are paid out in lump sums, held for minor beneficiaries, used to provide [[Definition:Annuity | annuity]]-like income, or directed to cover estate taxes and settlement costs.<br /> <br /> 💼 From an insurance industry perspective, life insurance trusts represent a significant distribution channel for high-value [[Definition:Whole life insurance | whole life]], [[Definition:Universal life insurance | universal life]], and [[Definition:Survivorship life insurance | survivorship life]] policies. Advisors who structure these arrangements often work at the intersection of insurance, legal, and tax expertise, and the complexity of the vehicle means that [[Definition:Insurance agent | agents]] and [[Definition:Insurance broker | brokers]] serving affluent clients must understand trust mechanics to position products effectively. For insurers, trust-owned policies tend to be larger in face amount and longer in duration, making them a valuable segment — though they also require careful attention to ownership and beneficiary designations during [[Definition:Underwriting | underwriting]] and policy administration to avoid future disputes.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Life insurance]]<br /> * [[Definition:Beneficiary]]<br /> * [[Definition:Death benefit]]<br /> * [[Definition:Estate planning insurance]]<br /> * [[Definition:Universal life insurance]]<br /> * [[Definition:Insurable interest]]<br /> {{Div col end}}</div>

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