Trust-Owned Life Insurance - TOLI

AAA

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.

INVESTOPEDIA EXPLAINS '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.

VIDEO

RELATED TERMS
  1. Variable Life Insurance Policy

    A form of permanent life insurance, Variable life insurance provides ...
  2. Life Insurance

    A protection against the loss of income that would result if ...
  3. Permanent Life Insurance

    An umbrella term for life insurance plans that do not expire ...
  4. Universal Life Insurance

    A type of flexible permanent life insurance offering the low-cost ...
  5. Insurance Trust

    An irrevocable trust set up with a life insurance policy as the ...
  6. Medical Identity Theft

    Stealing another person’s health insurance information so that ...
Related Articles
  1. Retirement

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  2. Insurance

    The Dangers Of Stranger-Owned Life Insurance

    Find out how these policies can be used to abuse the system that many people rely on for protection.
  3. Retirement

    Variable Vs. Variable Universal Life Insurance

    Do you know why you might need one policy versus the other? Read on to find out.
  4. Options & Futures

    Getting Started On Your Estate Plan

    With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
  5. Insurance

    Life Insurance: Putting A Price On Peace Of Mind

    Would your death leave loved ones financially stranded? Find out how to ease your mind and keep them protected.
  6. Retirement

    Estate Planning Basics

    Deciding what will happen to your assets when you pass away is a must - no matter how wealthy you are.
  7. Options & Futures

    What are the most common momentum oscillators used in options trading?

    Read about some of the most common technical momentum oscillators that options traders use, and learn why momentum is a critical concept for options trading.
  8. Insurance

    Who are the best-rated life insurance companies in the US?

    Learn about what makes an insurance company the best. Read about the best life insurance companies in the U.S. in 2014, following ratings by Weis.
  9. Insurance

    What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but there are times when it isn't.
  10. Options & Futures

    How are Bollinger Bands® used in options trading?

    Use Bollinger Bands to identify volatility changes and place options trades at the right time; profit in bull or bear markets using these strategies.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center