Your parents. A 2007 report by the Pew Research Center, a public opinion research group, discovered 1 out of 8 Americans the ages of 40 to 60 are raising a child and caring for an elder parent. Life insurance can help provide care for elder parents, especially those who are living with their adult children. This support can also be applied to distant relatives and current in-laws.

Long-term care. Long-term care riders are offered with some life insurance policies. If you become ill or disabled and cannot work or care for yourself, these riders provide for the home health care or the nursing care needs of the policyholder. In some cases you can purchase the rider at no additional charge or pay a charge of 1 to 2 percent of the face value of the policy. Keep in mind, in order to fund long-term care your death benefit will be reduced leaving a smaller amount for your loved ones after your death. Some life insurers impose a limitation on the amount you can take out of the policy to fund long-term care. The aggregate limitations are generally 50 percent the face value of the policy, but there are insurers who will allow limitations of 70 to 80 percent of the policy’s face value.

Your premiums. Some whole life insurance policies have a separate account vehicle for accruing cash value in the policy that can eventually “self-sustain” the monthly premium. Found in whole life, universal life or variable universal life policies, the cash value account grows tax-deferred over a specified period. Once the account has gathered enough cash value, it can be used to cover insurance premiums.

Trusts. Trusts are created to manage assets on behalf of the beneficiaries of the trust. The trust often owns the life insurance policy on the grantor and distributes proceeds to the insured’s beneficiaries according to their wishes. Trusts are often put in place to provide a predetermined cash flow to surviving children. A portion of the trust is allocated between children in payments so they are not tempted to frivolously spend all of the money at once.

Funds to repay debt. This is very important because many debt agreements specify that the remaining balance on any debt is payable following the death of the debtor. You can purchase credit life insurance for this purpose alone, but remember that a large life insurance policy typically provides enough funds to pay off any outstanding debt.

Death taxes. The death tax is a federal tax and in some cases, a state tax that is placed on a transferable estate after the time of death. Proceeds from a life insurance policy can be used to pay the tax liability so heirs won’t be socked with this tax when assets are transferred to them.

Dependents education. Life insurance can help pay for your children’s tuition if they attend or plan to attend a private school, preschool, prep school, private university or trade school.

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