Which type of insurance is crucial for estate planning?

Life insurance is crucial for estate planning because it plays a vital role in ensuring that the financial needs of beneficiaries are met after the policyholder's death. It provides a death benefit that can help cover estate taxes, settle debts, and support the financial well-being of surviving family members. This can be especially important for individuals who have dependents or specific financial obligations that need to be addressed upon their passing.

In the context of estate planning, life insurance can also be used strategically to equalize inheritances among heirs or fund trusts. It helps maintain financial stability, ensuring that the estate's value is preserved and that loved ones are not burdened with financial difficulties during a challenging time.

Health insurance, property insurance, and auto insurance, while important for general financial protection and risk management, do not directly impact estate planning in the same fundamental way that life insurance does. They primarily serve to protect against losses and expenses incurred during the policyholder's lifetime, rather than providing financial support to an estate or beneficiaries after death.