Which of the following financial products creates an instant estate, no matter when the date of death?

Life insurance is the financial product that creates an instant estate regardless of when a person passes away. The defining feature of life insurance is that it pays out a defined death benefit to the beneficiaries when the insured individual dies, regardless of when that event occurs, as long as the policy is in force at the time of death. This means that the insured can ensure that their loved ones are financially protected and have access to funds immediately upon their passing.

In contrast, mutual funds and certificates of deposit (CDs) do not provide an immediate benefit upon death. Mutual funds are investment vehicles that can fluctuate in value and require liquidating the investment rather than providing a set sum upon death. CDs, while they do provide some level of savings benefit, must also be accessed through a proper process and do not present an instant estate. Deferred annuities provide income payments at a future date, and while they can accumulate value, they do not create an instant estate in the same way that life insurance does. Therefore, life insurance remains unique in its ability to provide an immediate financial benefit upon death, solidifying its role as a key tool in estate planning.