The financial services professional involved in life insurance planning must thoroughly understand the estate, gift, and generation-skipping transfer tax implications of life insurance. Often life insurance planning is specifically driven by the need to provide solutions to the client�s estate planning problems. As we discussed earlier in this chapter, unique tax advantages usually exempt life insurance policy cash value build-up and death benefits from income taxes. Thus the potential transfer taxes applicable to life insurance proceeds become the most significant tax costs facing the insured and his or her family.