What is an ILIT and how does it help remove life insurance from the taxable estate?

What is an ILIT and how does it help remove life insurance from the taxable estate?

• A. An ILIT owns the policy; proceeds excluded from the insured's estate for tax purposes.
• B. An ILIT makes the insured pay higher premiums.
• C. An ILIT ensures proceeds are taxed as income to the heirs.
• D. An ILIT only works with variable life policies.

Answer: (A)