A:Answer  Generally, yes. Including an advance directive in your estate plan is a personal choice that can allow you to plan and communicate your medical treatment preferences when you are unable to do so on your own.

Here are some things to think about:

• Having an advance directive as part of your estate plan could help both you and others who may be responsible for your medical care during a time of need.

• Advance directives can be made even if you are currently young and healthy.

• There are two common types of advance directives: a living will to express one’s desired course of healthcare treatment and a durable power of attorney for healthcare to empower a trusted individual to carry out those wishes. 

What are some benefits to including an advance directive in your estate plan?

Personal autonomy: If maintaining control over your healthcare decisions is important to you, creating an advance directive allows you to express your preferences in specific medical situations so  your wishes are respected when you are no longer able to communicate them yourself. 

A plan for the unexpected: Life is unpredictable and medical emergencies or accidents can occur unexpectedly. Having an advance directive in place helps prepare you for unforeseen circumstances where you may be unable to communicate your healthcare preferences. Additionally, having a life insurance policy can help with financial support for your loved ones in the event of your untimely passing.

Burden relief: An advance directive relieves your loved ones from the burden of making or executing difficult decisions on your behalf. By clearly expressing your preferences, you spare your family members the potential conflicts and emotional distress that can arise from having to make healthcare choices without your guidance.

When should I make an advance directive?

An advance directive must only be made when you are in a sound mental state that allows you to make informed decisions. By having an advance directive in place early, you can make your preferences for your medical treatment known.

How do life insurance and advance directives work together in an estate plan?

Life insurance and advance directives have complementary roles in an effective estate plan. 

Life insurance can help provide financial protection for your loved ones in the event of your passing as an insured. When incorporating life insurance into your estate plan, it’s important to designate beneficiaries who will receive the insurance proceeds directly upon your death.  

If you don’t currently have a life insurance policy, learn more about the different types, including term, permanent, whole and universal life insurance. 

The two common types of advance directives are a living will and a durable power of attorney for healthcare. A living will outlines the type of medical treatments or interventions you want or don’t want in specific situations, such as life support, resuscitation or artificial nutrition. A durable power of attorney for healthcare appoints someone you trust to make healthcare decisions on your behalf when you’re unable to do so. 

Can executing an advance directive affect my life insurance policy?

Executing an advance directive generally does not directly affect your life insurance policy. Your life insurance policy is a separate contractual agreement that provides a death benefit to your designated beneficiaries upon your passing while insured, and most states have determined that an advance directive does not alter the payout of the policy benefits.

What do I do with an advance directive?

Once you have created your advance directive, you should:

• Create digital and physical copies of your advance directive and ensure they are safely stored in a secure place that you can remember and easily access.

• Share copies of your advance directive with your loved ones, particularly the individual who holds your power of attorney, and relevant healthcare providers and applicable financial professionals. 

• Review periodically to check if any updates or changes are needed to reflect your current circumstances.

Agents can make a difference 

Selecting the right type of life insurance policy requires careful consideration of your financial situation, goals and loved ones’ needs. Your local Farmers Insurance^® agent is here to help you navigate the options so you can choose the best policy for your individual circumstances. Find an agent.

Farmers^® companies, employees, agents, and representatives do not provide legal or tax advice. In general, partial or full surrenders from a permanent life insurance policy in excess of the policy’s basis are taxable. Limited circumstances exist where death proceeds will be taxable. This material has been prepared for general informational purposes only, and is not intended to provide and should not be relied on for tax, legal or financial advice. Because each individual’s situation is different, specific advice should be tailored to your particular circumstances; you should always consult your own tax, legal and other advisors before engaging in any transaction. This material reflects our general understanding of current law as of the date hereof, but tax laws and IRS administrative positions may change. This material is not intended to and cannot be used to avoid any Internal Revenue Service penalties. We specifically disclaim any liability resulting from the use or application of information contained in this publication. Farmers New World Life Insurance Company is not affiliated with or endorsed by any government agency.

FCS-2188-23      06-24

The information contained in this page is provided for general informational purposes only. The information is provided by Farmers^® and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

Related articles