Life Insurance

Can insured and beneficiary be same on life insurance?


Top Answer
User Avatar
Wiki User
2012-07-26 11:03:49
2012-07-26 11:03:49

Well, in practice, I hope you see the problem with this arrangement: by the time it matters who the beneficiary is, the insured is dead. This presents a conundrum.

Legally, any property of the deceased ... including, I suppose, life insurance benefits ... would become the property of the deceased's estate, and that would be distributed according to the will and/or relevant law. So it's not an insurmountable problem.

It is more often best that the beneficiary be someone other than the insured. Whenever possible, it is best to keep assets out of your estate.

User Avatar

Related Questions

Life Insurance is the same thing as Death Insurance, If you are insured, and you die, your beneficiary receives the proceeds of the life policy.

Only the POLICY OWNER can change the beneficiary on a life insurance policy. In most cases, the insured is also the policy owner, but it's not a general rule. The policy owner can be another person who is paying the premium (for example, a parent or guardian, spouse or other family member), or a bank, or a business. If the policy owner is not the same person as the insured, then the insured has no control over who the beneficiary is on the policy.

Yes, the policy owner can change the beneficiary. Sometimes, the person insured and the policy owner are not the same person, if someone else pays the premium for the insurance policy. For example, a parent or guardian taking an insurance policy on spouse or children. Some insurance policies are assigned to cover bank loans, and even if the insured may pay the premium, the bank can be assigned as the owner of the policy; in that case the bank decides who the beneficiary is going to be (usually in this scenario, the bank will also be the beneficiary).

If the beneficiary of a policy has died, the estate of the beneficiary can still collect the insurance payment, assuming that the beneficiary does have an heir or heirs of some kind (as most people do). Note that this is a fairly unusual situation, because normally when a beneficiary dies, a new beneficiary is named. There is no reason to allow the policy to have no living beneficiary, unless the insured and the beneficiary happen to die at about the same time, and there is no time to name a new beneficiary.

If there is a policy on your life the person currently listed as the beneficiary will be paid upon your death. The person listed as the owner of the policy is the only one who has the right to change the beneficiary. Usually the owner and insured are the same person but not always. You may wish to check on this and change the beneficiary if your situation has changed.

Actually the odds could be 100% if the woman's husband owned three different life insurance policies naming her as the primary beneficiary for each of the policies. Or, perhaps her parents each owned life insurance policies, as well, and named her as the primary beneficiary.

Only the owner of the policy can change the beneficiary of a life insurance policy or make any other changes to the policy. Most of the time the owner and person insured is the same person but not always. The owner is usually the one who paid the premiums. If you are the owner, changing the beneficiary is a simple completion of a change form. Most insurance companies have a change form that has places for several different types of changes on one sheet of paper. After the change in beneficiary is processed the company will send you a certified copy to place in your policy.

No state law will require whom the beneficiary is on a life insurance policy. This is up to the owner of the policy. it may be changed by the owner of the policy if they choose to do so as well. Remember that the owner and the insured is usually the same person but they don't have to be. Such as with a minor child. A parent would want to be the owner of the policy while the child is the insured. This is the same with any policy. The owner has ultimate control over the policy and is the only one who can make changes or cancel the policy. The insured has no say after the policy is issued to do anything with it.

There is no difference, fdic stands for federal deposit insurance corporation, which is exactly the same insurance from the same people and the same place.

== == Do you know what companies they were insured with? All you need to do is call the agent or the insurance co claims department and start the process. Of course in order for you to collect you would have had to of been named the beneficiary. You will need the death certificate. It's that simple. Here's basically the same information from the Insurance Institute of America

Sure it can, provided the court has sufficient proof to esablish doing so would be in everyone, particularly the children's best interest. This might be possible, but if so it's done very, very rarely. I have never heard of it. A court might pressure the policy owner to change the beneficiary, but I don't believe they can force them to, or arbitrarily change it.

In any life insurance policy, though there is provision for appointment of nominee, on maturity the proceeds will be payable to the policy holder if he/she is alive. By this way, the owner of the policy and the beneficiary is the same person.

No. Life insurance benefits are not eligable for taxation unless the insured passed away without assigning a beneficiary. In this situation the benefits are paid into the deceased's estate and are subject to any back taxes or child support owed by the deceased, or the would be inheritor. Cash value is not the same as an insurance benefit and may be taxable in some situations. Group (employment) insurance has no cash value.

A beneficiary of a life insurance policy is not required to sign the policy or the designation of beneficiary portion of the application for insurance; the insured signs the application for insurance and designates the beneficiary. The proceeds of a life insurance policy are not payable by the insurer until the death of the insured and upon the submission of documentation specified by the insurer.As stated in the preceding answer, if the primary beneficiary is no longer alive, proceeds are payable to the contingent beneficiary named on the application.Keep in mind that a claim must be made for the proceeds; ordinarily the insurer would not know that the insured has died unless a claim is made. However, the law of many states require that life insurers make a periodic diligent search for insureds to determine whether they are living or dead. This can include a search of public records (such as Estate proceedings) or in some cases, obituaries. If it is determined that the insured is dead, the insurer will then be required to make a diligent search for the named beneficiaries. The beneficiaries may be, for example, the persons in charge of administering the Estate. If so, contact will be made by the insurer and the proceeds can be paid. There are other permutations that are possible, but these are some basics.

Life insurance is often purchased on the advice of an attorney when writing your will and planning your estate. When you purchase a life insurance policy, you need to name someone as the beneficiary of the policy in the event of your death. The beneficiary of a life insurance policy is the person who receives the insurance money after the death of the insured person. Anyone can be named as the primary beneficiary of your life insurance policy. In most cases, the person you choose will be your spouse. If you live in a community property state, laws in those states require you to name your spouse as beneficiary unless he or she has given you written permission to name someone else. You can also name a contingent beneficiary that would receive the proceeds of your life insurance if your primary beneficiary is deceased. You can also name two or more people as your primary beneficiaries. For example, if you have no spouse or children, you may choose two siblings to share the proceeds of the policy. In this case, specify the percentage of the proceeds that each sibling gets, i.e. fifty percent each, instead of an exact dollar figure. If you have minor children, your main reason for purchasing a life insurance policy may be to provide for their care until they reach adulthood. You and your spouse need to name a guardian for your children in your will, especially in the event that you both die at the same time. The beneficiary of your life insurance policy in this case could be the named guardian or a trust fund set up to hold the policy benefits. If you are a single parent, these decisions are critical to your children's future. You should avoid naming your estate as beneficiary since all assets in your estate must be distributed to the appropriate heirs by a probate court. Probate court proceedings can significantly delay payment of benefits to your loved ones. If a specific person has been named as the beneficiary, the proceeds are paid directly to that person and are not subject to the probate court. After you are satisfied with your beneficiary designation, you should periodically review your estate plan and will. You can easily revise the beneficiary to your life insurance policy when changes occur in your life.

Yea, if you have two different contracts and the beneficiary is the same, you can have two different policies which is legal.But against same contract, you cannot take two policies when the beneficiary is the same which is illegal.

Individual added to a life insurance policy other than the insured named in the policy. For example, an insured father can have a dependent son and daughter added to the policy as additional insureds. In many instances, adding an additional insured to an existing policy is less expensive than purchasing a separate policy for that insured. In property and liability insurance: another person, firm, or other entity enjoying the same protection as the named insured.

It will go to the alternate beneficiary, if one is listed if not it will be paid to the estate to be distributed in the same way as any other money in the estate.

Absolutely not. Just because one receives the benefits of a life insurance policy does not make them responsible for the debts of the one that has passed away. The person receives the benefit tax free to spend how they see fit. That said, whole life policies accumulate cash value. This is essentially a savings account within the policy. The insured, prior to death, can borrow some or all of the cash value by means of a policy loan. If it is not repaid, the death benefit payable to the beneficiary would be reduced by the outstanding amount of the loan plus the contract rate of interest. This is technically different from the beneficiary being responsible for the general debts of the deceased, but the outstanding policy loan would reduce the amount payable to the beneficiary. Therefore, indirectly, the beneficiary is bearing responsibility for this debt. The lack of responsibility for the deceased's debts is the same if term insurance is involved. Term insurance does not accumulate cash value, so no policy loans can be made. However, a life insurance policy can sometimes be used as collateral for a loan. If the insured dies before the loan is paid, the creditor may make a claim to the policy proceeds, which may or may not be given preference over the claim of the named beneficiary.

It is totally illegal to have two insurance policies against same contract and same beneficiary. This is a serious contravention of law and in case any claim arises, the insured's claim will be summarily rejected and will be liable for explanation for such misrepresentation of facts.

Life insurance is more properly called "death insurance", because payment is triggered upon the death of the person insured if the death is from a cause that is not excluded by the policy. Payment is made to the beneficiary named in the policy. If no beneficiary is named, or if that person is deceased and there is no contingent beneficiary named, proceeds are paid to the estate of the person insured under the policy. There are 2 primary types of life insurance: term and whole life. Term insurance is considered to be "pure protection" in that there is no savings element. As such, it is less costly than whole life. It is purchased in a stated amount (for example, $50,000), and for a stated period of time (for example, 20 years). There are variations as to whether the premium remains the same for the entire term, or increases over the term. Proceeds are payable if the insured dies while the policy is in force. If he/she does not, nothing is paid and no value has accumulated. Whole life insurance has a savings element. This means that some of the premium pays for the protection, and some goes into somethink akin to a savings account. The value of the latter accumulates slowly at first, but the rate picks up as the policy remains in force. Often, the insured is given options as to how to apply the savings element, such as into a selection of mutual funds. In both types of insurance, the insured may be able to discuss additional options, for an additional premium. A couple of these include: (1) a guaranteed insurability option, whereby the insured is given the right to buy additional insurance at certain points in time without regard to then-current health; (2) waiver of premium, which forgives the payment of future premiums if the insured becomes disabled according to definitions in the policy. There are others. Most insurers sell insurance through agents or brokers, who often advertise their services. It is critical for the consumer to ensure that the agent or broker is licensed to sell life insurance in the state. This can be done by contacting the state insurance regulator. It is also important to determine if the agent or broker is authorized ("appointed") by the insurer to sell its products. This can be determined through the state insurance regulator as well.

It's personal choice. Some people may split it evenly amongst the beneficiaries, while others may decide that one beneficiary is in need more than others. Think about why you are getting life insurance in the first place, and then think about who the beneficiaries are and if their needs are the same or not.

If there is any outstanding premium, the same is deducted while settling the death claim, though no other fees are deducted from the funds owed to the beneficiary.

STILL ONE OF THE GREATES BENEFITS AVAILABLE: Life insurance with a named beneficiary is paid outside the estate, directly to that beneficiary. It is not subject to any other claims by anyone involving the decedent. (It is also not taxed). Unfortunately, some people name themselves or their estate (which is the same) as the beneficiary. Then it simply becomes another asset of the estate to be taxed, and distributed after handling the claims against the estate.

Whole life Insurance Plans has many benefits such as they give a cover up to 99 years of age. The policy holder can participate in that company's profit through increase in Sum Insured. Also, the cash value will be the same as or more than the total premium paid by insured at year 8 of policy.

Copyright ยฉ 2020 Multiply Media, LLC. All Rights Reserved. The material on this site can not be reproduced, distributed, transmitted, cached or otherwise used, except with prior written permission of Multiply.