Pays out to beneficiary-just the value of coverage not cash value if sold.
Life Insurance and EstatesNO, not if the named beneficiary is not deceased. The proceeds of a life insurance policy belong to the named beneficiary not to the deceased. It should not under any circumstances be included in the estate of a deceased or the probate process. If no beneficiary is named or if all beneficiaries are deceased then their is no alternative. When their is no named beneficiary then the value of the life insurance policy reverts to the insured and must then be included as part of the deceased estate
Yes. Insurance proceeds, unless the beneficiary is the estate, are payable directly to the person who is named as the beneficiary beneficiary. As such, the policy proceeds pass "outside" of the estate and do not become a part of it. If the same person who is the named beneficiary of the policy is also the executor of the estate, he/she is required to carry out the directives of the Will. This includes paying legal debts of the deceased, ensuring protection of the value of the assets of the estate, and distributing the assets as directed in the Will.
As a general rule, life insurance proceeds from any type of policy are not taxable to the beneficiary. In addition, any loans from cash value are not taxable unless the policy lapses.
The face value of the insurance policy is payable to the beneficiary upon the death of the insured.
You can take out the net cash value on your policy if you have cash value, or you can assign the policy as collateral for a loan, and change the beneficiary to be the lender.
Yes, they have a right to know the face value of a life insurance policy because if they die they could pass the money to people who needs it and they could do better thing to other people
== == == == The life insurance policy will state the face value ( death benefit ) of the policy. However, it may not state the amount that each beneficiary will receive as the number of beneficiaries may have changed since it was issued. Until a claim is paid, the beneficiaries will not know how much they'll receive.
A life insurance policy is a contract issued by a life insurance company providing protection against the death of an individual in the form of a payment to a beneficiary. Premiums are paid by the owner of the policy to keep the life insurance contract "In Force". In exchange for a series of premium payments or a single premium payment, upon the death of an insured person the face value (and any additonal coverage attached to the policy), minus outstanding policy loans and interest, is paid to the beneficiary.
Term life insurance is only life coverage. When the person who is insured dies, the beneficiary receives the amount of the policy. Whole life insurance is a term life policy combined with an investment. This policy builds value.
A life insurance policy has an owner, who is the person who is buying the insurance, as well as a designated beneficiary. Some kinds of life insurance, called whole life, have value as an investment and can be cashed out by the owner if he or she so desires (unlike term life which has only a death benefit and no cash value prior to the death of the insured). Now, you haven't said who this other person is who has received a payment from the insurance company. If it is someone other than either the policy owner or the beneficiary, the only other scenario I can imagine is that someone filed a lawsuit claiming that there was some kind of fraud going on, and that he (or she) is the actual owner or beneficiary of the policy, and not you. If the judge agrees, then the insurance company must comply.
Not usually, though I can't say that it is impossible. Life insurance is not regulated like car and home so one particular company could promise you that. Generally the cash value is if the insured cashes in the policy and the face amount is paid to the beneficiary when the insured dies. I was a life insurance agent for 15 years.
Once the term policy expires there is no further benefit owed to the owner/beneficiary of the policy. You have converted the whole/entire life policy into a term/temporary policy. The cash value was used to pay the premiums for the term policy. Therefore, there is no longer a cash value on your insurance policy. Once the temporary policy expires, a new policy or extension must have been in place before the insured's death to receive any benefit. This is one of the non-forfeiture options standard to insurance policies.
Subject to the terms and conditions of the policy, the outstanding balance of the policy loan (plus accrued loan interest, the rate of which will be stated in the policy) will be deducted from the death benefit. The balance of the death benefit will be paid to the beneficiary.
My mother is up in age and in poor health, she has several life insurance policies. She wants to know if a beneficiary needs to be changed or can her will surfice?
You reduce the lift insurance policy face value and payment by considering the basics of the cash value policy basics.
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.
A percentage of an estate left in a Will to a beneficiary, where the final value of the gift to the beneficiary depends on the sum at which the estate is sold.
The cash value is the amount of money your insurance policy is worth to the owner of the policy if the insurance is cancelled and the policy terminated. The insurance company will mail a check to the to the policy owner upon policy termination or cancellation by request of the owner. I would strongly encourage you to consult a professional in your area before cancelling an existing policy. There may be other options and alternatives to access the value of the policy without cancelling the insurance policy.
You call the life insurance company and get the present cash value out of the policy. The policy will then be divested.
The claim proceeding net of outstanding policy loan balance including accumulated loan interest will be paid to the beneficiary.
The decreasing term insurance has its face value reduced as the policy ages.
The cash value of any policy depends on its face value and the value of the policy at maturity when the policy has been maintained in force. The insurance company issuing the policy will be able to give you the answer you want.
A policy loan is available only against a whole life policy, not a term life policy. Whole life accumulates cash value and a term life policy does not. The insurance policy will specify the interest rate that will accrue on the loan. The loan does not have to be repaid, but interest will continue to accrue if it does not. The insurance company will permit only a specified percentage of the cash value to be borrowed, and there must be a sufficient accumulation of cash value to a policy loan to be made. You should contact the insurance company directly to make arrangements for the loan.
As long as you are alive, it is your money to do with as you see fit. While the foregoing is a simple answer, it is not applicable in all cases. That is, the proceeds (face value) of a life insurance policy do not become payable until the person insured (you) dies. Assuming that your father is alive then, complies with the mechanics set forth in the policy for making a claim, and that there are no other beneficiaries, he would get the proceeds. You have not stated who is the "owner" of the policy. The policy owner may be a different person from the beneficiary, and his/her identity would be shown on the application (which is normally attached to and made a part of the policy). Yet it may be you. The owner generally has the right to change the beneficiary of the life insurance, so were you the owner of the policy for example, you could designate your estate as the beneficiary. That way, the policy proceeds would pass into your estate at death and be distributed according to your Will (if you had one), or according to your State's laws of descent and distribution (if you died without a Will). Also keep in mind that there is a difference between term and whole life life insurance. Term does not accumulate cash value, and therefore, there is no money to get until the policy pays the beneficiary upon your death. In contrast, whole life accumulates cash value during the period that it is in force. The cash value can be used to buy additional "paid up additions" (fully paid additional increments of life insurance), it can gather in essentially a separate account, or it can accumulate in some other ways specified in the policy. The owner of the policy can borrow against the cash value (interest is usually charged), and if not repaid, the amount borrowed typically reduces the death benefit.