You have a life insurance policy because you want to know that your family will be taken care of when you pass away. You can’t predict when that will be, but you know that you can have a policy in place in advance so that no one has to worry.
In this sense, life insurance is part of your estate plan. You don’t have that money yet, but it is still a valuable asset that will pay out to your family at the time they’re dividing your estate. They can use it just like any other financial assets you leave behind.
Life insurance beneficiaries take precedence
That said, life insurance is not going to fit in to your will in the traditional sense. You have to consider the beneficiary designation. This takes precedence over your will. Whoever you list as a beneficiary will get the money, regardless of what your will says.
For instance, maybe you have three children. You want them to divide the life insurance money, and you leave them instructions in the will to that end. However, you just list your oldest child as the beneficiary.
The life insurance company is simply going to pay the full amount to your oldest child. The company is unconcerned with what your will says. Your oldest child can then divide the money three ways if they’d like, but they’re not obligated to do so.
Making a plan
There are ways around this, such as listing multiple beneficiaries or having the insurance pay in to a trust. Be sure you know about all of your options. Your estate planning attorney can help you.