Individually owned bank accounts and CD's typically: - Offer no separate or enhanced death benefit.
- The value of these accounts generally must pass through probate, and
- The accrued earnings on the account since the last tax year will be taxed.
Annuities that have a named beneficiary do pass directly to the beneficiaries and avoid probate, however the beneficiary will be subject to paying ordinary income taxes on any gain in the annuity contract. This could be a potential tax liability for your heirs. The life insurance policy can provide a substantially higher financial benefit for the beneficiaries because the assets exchanged generally purchase a death benefit larger than the original assets. In some cases, it can more than double. In addition, life insurance death proceeds pass directly to the named beneficiary, earnings within the contract do not incur taxation at the death of the insured and the death benefit is paid income tax-free to the beneficiary. No matter which type of asset is replaced by the life insurance, the tax-deferred accumulation within the policy as well as the income tax-free death benefits of the life insurance may result in a superior outcome for the beneficiaries; assuming comparable interest rates on the life insurance and the other asset class. None of the other assets mentioned above can compare to the multiple benefits of immediate increase in estate value, tax-deferral and income tax-free benefits to the beneficiary of a life insurance contract. Please call 1-800-773-6559 for more information or to schedule a personal appointment with a Provident Financial Advisor. | 
