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How do you cash in a life insurance policy given to me by my dad when I am the insured and he is the beneficiary?
Wiki User
∙ 13y ago
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.
Wiki User
∙ 13y ago
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Can you make a claim on a insurance binder?
If you have applied for insurance and paid a premium, you are essentially insured if you have been given a binder. In life insurance if the applicant dies before the policy can be issued, you would file a claim as if it had. The claim would be processed and if the applicant is found to be insurable had he still been alive, the claim would proceed as if he already had a policy in force before he died.
How much does a one-million-dollar life insurance policy cost?
It depends on the insurance company and it also depends on rather or not the person whom you are trying to get insured was a smoker, drug user, or had HIV/AIDS. You can not get a policy without the insured knowing it. They must pass a health screening. That is what determines your quote. These online insurance companies can't really tell you anything with their online quotes. But if you are really serious then you would need to contact a insurance salesman or some sort of agent. They say, the typical million-dollar policy is around $250. Not affordable for the average person. And also remember that you have to have a reason for wanting a large policy like that to begin with. That type of policy will not be given to the average person who's gross income is $25K yearly. They would offer a person like that a normal life insurance policy. You must have reason for wanting one.
How do life insurance settlements work?
Life settlements involve the sale of an in-force life insurance contract, by the contract owner, to a third party. Generally, the seller of the policy receives the policy's cash value, plus an additional amount determined by an appraisal-termed the "current market value." In consideration of the monies paid to the policy owner, the third party is: named the policy owner and beneficiary, continues to pay all premiums as they come due, and will receive the policy proceeds upon the death of the person insured under the policy. All types of life insurance, term, universal or whole life, can have market value much like real estate or equities. And, given the right circumstances, a life settlement can make a lot more sense than allowing an in-force life contract to lapse.
What does an underwriter do?
In the area of insurance, an underwriter is a professional, usually employed by an insurance company, who makes determinations about whether a risk meets the criteria for insurance under a given form of policy. In other financial arenas, underwriters perform similar functions related to financial investments, such as mortgages.
How long after purchase of life insurance policy can you borrow from face value?
Take a look at your policy paying attention to the illustration in the guaranteed column. This will show you how much money you will have to borrow against in a given year. When there is enough you can borrow against it. But be careful!
Can a spouse change their deceased spouses designated beneficiary on a life insurance policy?
No. The contingency that triggers payment of a life insurance is the death of the named insured. That person could have changed the beneficiary designation prior to his/her death. Even if the policy had given the power to change the beneficiary to another person, the change would have had to be exercised before the named insured dies.
What happens to a home insurance policy when the holder dies?
the house is paid off and given to the beneficiary
How are life insurance policies given to the beneficiary?
If you are referring to the policy document itself, it can be by any means of physical delivery. However, what I think you are referring to is the proceeds of the policy that are payable upon the death of the named insured. In general, the policy outlines what has to be done to collect proceeds. Briefly, it involves the beneficiary providing the insurance company with a certified copy of the death certificate (obtainable from the county in which the insured dies) and a claim form (which can be obtained from the insurer). It is best to send the material to the insurer by certified or registered mail so that you have proof of receipt. Assuming the policy was in force at the time of death, and the person or entity claiming to be the beneficiary is shown on company records as the designated beneficiary, payment is usually made within 30-60 days.
What to do if car insurance cancels without informing the owner?
All insurance companies are required to notify the insured policy owner of cancellation at the primary address given by the insured. Listed Lien-holders are likewise notified at the address given for the Lien-holder. Most often when the policy owner does not receive the notification it is due to an incorrect address provided by the insured or a change of address that the insured has not given to the insurance company. The insurance company will always send policy notices to the address on record with the company. Bear in mind that these days many companies are allowing the insured to elect electronic communication in lieu of standard mail. If this was the case then notification may have been sent to you by email.
What is the purpose of a term policy?
A term policy is a form of life insurance that is the least expensive method of insuring that if one dies during the term, the money will be given to a beneficiary.
If a minor child makes a claim on a life insurance policy and another inidividual is the designated beneficiary what consideration is given to the claim by the insurance company?
The proceeds go to the beneficiary. That's why it's important to make the proper plans and trusts.
Does an insurance policy given to you after the death of the insured have to be declared on a tax return?
Normally, life insurance benefits are tax free, but you may want to consult with a tax specialist.
Are beneficiaries on life insurance police responsible for deceased debt?
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.
What is life insurance and how do I obtain it?
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.
If an ex-spouse makes a claim on a life insurance policy and another inidividual is the designated beneficiary what consideration is given to the claim by the insurance company?
The person named beneficiary is the sole recipient, the ex-spouse would not have a supportable claim to any portion of the death benefit.
Choosing the Right Life Insurance Beneficiaries?
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.
Does car insurance cover the driver if he is not on the policy?
It may and it may not. It depends on the definitions of an "insured" driver under the terms of your insurance policy and the type of insurance policy you bought. Most standard policies will extend coverage to certain drivers you have given permissive use while others such as low cost "Named Driver" policies extend coverage to no one other than those named on the policy. Contact your insurance agent if you need assistance with your policy language.
