Because life insurance is a contract and can be situated so that it is not property of the estate, it can escape public disclosure. This makes it a very desirable vehicle for accomplishing discreet postdeath funding, such as private business agreements in which life insurance proceeds are used to retire an outstanding personal debt. Life insurance and disability insurance are sometimes utilized to guarantee future payments under secret liability settlements. The insurance will continue the periodic payments if the liable person dies or is disabled.

Through proper arrangements life insurance proceeds can even be arranged to provide anonymous gifts to the intended recipients. This requires a third party who knows of the arrangement and can file the claim for death benefits.

Life insurance has long been used as a funding device for partners in nontraditional living arrangements or those in amorous involvements outside of wedlock. Insurance companies are not eager to issue policies for some of these purposes and may decline the application if the purpose is openly set forth. However, the insurance company is unable to stop a policyowner from changing beneficiary designations on an existing policy. This contractual flexibility allows policyowners to accomplish their objectives indirectly if they cannot do so directly at the time they apply for the policy.