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DEFINITION of 'Trust-Owned Life Insurance - TOLI'

Life insurance that resides inside a trust. Trust-owned life insurance is used by many high net worth individuals as the cornerstone of their estate plan. It enables the trust to provide for survivors, cover estate tax liability planning, balance inheritances among heirs and meet charitable objectives.

BREAKING DOWN 'Trust-Owned Life Insurance - TOLI'

Life insurance is viewed as a long-term asset that will not be used for its true purpose, ideally, for decades. Consequently it is often overlooked when monitoring and managing the overall trust. However, it is important that the trust-owned insurance policies be reviewed regularly. The existing policy might not meet the current needs of the trust, and newer insurance products might be more cost efficient and offer better options and features.

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