Are “Death Puts” an Estate-Tax Hazard?

Where can retirees find higher income yields? Long-term corporate bonds. The catch? In five or ten years, when we're experiencing boom and inflation, the market value of today's 30-year bonds will plunge.

The solution? This WSJ Journal article (subscription) spotlights "death puts:"

Death puts guarantee that when the owner of the bond or CD dies, the heirs can redeem it at face value, meaning they get back all the money that originally was invested.

Investors in their 70s or 80s may find death puts – more properly called "estate-feature" puts – worth the cost, the WSJ suggests. But what about estate tax?

Say I buy a 30-year bond at 100 and it's worth 85 when the return of high inflation kills me off. My heirs will receive a bond eventually worth 100 at an estate-tax discount because the tax will be levied on 85, not 100. With a death put, wouldn't the full 100 be taxed? If so, do my heirs really benefit in the long run?