What Is A Life Insurance Trust Fund? 
A Life Insurance Trust Fund is a trust that holds a life insurance policy or policies . The fund actually does not hold cash except what exists in the policy , and the only cash paid into it is to pay the premiums of the policy and cover any expenses the trust may incur . It is upon the death of the Grantor-Insured that the death benefit is paid to the trust and distributed according to the terms set forth in the trust . 