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What is the time limit during which proceeds will be held at interest for a contingent beneficiary after the death of the insured?
Wiki User
∙ 14y ago
Indefinitely or until the contingent is found and paid.
Wiki User
∙ 14y ago
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What happens if the beneficiary of a life insurance policy is deceased?
Generally, if the beneficiary is deceased, the proceeds go to the contingent beneficiary, or if none, to the estate of the insured. An attorney must be consulted to direct you on how to handle this in your state. It depends on whether the beneficiary predeceased the insured. If the beneficiary died before the insured then the proceeds go the the contingent beneficiary. If there is not a contingent, check the contract, it probably is paid to the Owner of the Estate of the Insured. If the Beneficiary died after the Insured, the proceeds go to the Beneficiary's Estate. It is important to have a contingent beneficiary specified in your life insurance policy. This way, if the beneficiary passes away, the contingent beneficiary will benefit. If there is no contingent beneficiary, and the beneficiary has deceased, the proceeds of the life insurance policy, go to the estate and is distributed according to the Will.
What is a contingeny beneficary?
A Contingent or Secondary Beneficiary will receive the proceeds from a life insurance policy after the Insured's deaths, if the Primary Beneficiary does not survive the Insured Person. This means, if the primary beneficiary is not alive at the time of death of the insured person, then the contingent beneficiary will receive the proceeds from the life insurance policy. Examples of situations which may give rise to the contingent beneficiary receiving the proceeds from a life insurance policy. 1. The insured and primary beneficiary die in an accident together, for example, a car accident. 2. The primary beneciairy dies, and the insured forgets to update the beneficiaries for his/her life insurance policy.
What is a beneficary?
A Contingent or Secondary Beneficiary will receive the proceeds from a life insurance policy after the Insured's deaths, if the Primary Beneficiary does not survive the Insured Person. This means, if the primary beneficiary is not alive at the time of death of the insured person, then the contingent beneficiary will receive the proceeds from the life insurance policy. Examples of situations which may give rise to the contingent beneficiary receiving the proceeds from a life insurance policy. 1. The insured and primary beneficiary die in an accident together, for example, a car accident. 2. The primary beneciairy dies, and the insured forgets to update the beneficiaries for his/her life insurance policy.
Does life insurance become part of the estate?
The proceeds of a life insurance policy become part of the deceased's estate under limited circumstances: 1. If the named beneficiary on the policy is the estate of the insured; 2. If the named beneficiary and any contingent beneficiary(ies) predecease the insured or otherwise relinquish their interest in the proceeds.
When talking in life insurance what does contengent mean?
In regards to life insurance, contingent usually means secondary. For example a contingent beneficiary is a secondary beneficiary, not the primary beneficiary. The contingent beneficiary would receive the proceeds from a life insurance policy if the primary beneficiary were not alive when the insured person dies.
Can a beneficiary on life insurance refuse the responsibility?
It is not a question of refusing responsibility. The beneficiary is the person or institution designated to receive proceeds upon the death of the insured. He/she/it has no obligation to pay future premiums. However, the beneficiary is free to decline the proceeds in which case they will be paid to a contingent beneficiary listed in the policy; in none, the proceeds will be paid to the insured's estate.
What if the beneficiary of a life insurance is deceased?
When a life insurance policy is purchased, the purchaser (usually the insured) designates a primary beneficiary and a contingent beneficiary. The contingent beneficiary gets the proceeds if the primary beneficiary predeceases the insured. The insured can name a new primary beneficiary by contacting the insurance company or the insurance agent. THIS IS ONLY TRUE FOR PURCHASED LIFE POLICIES___ NOT POLICIES THROUGH AN EMPLOYER UNDER ERISA.
Who gets the insurance if the beneficiary cannot be found?
Normally, when one buys an insurance policy a primary beneficiary is designated, as is a "contingent" beneficiary. The latter is second in line to get the proceeds if the primary beneficiary predeceases the insured and the insured does not name a new primary beneficiary. Another circumstance for the contingent beneficiary to get the proceeds is when the primary beneficiary cannot be found. The beneficiary designation(s) on the policy may also provide in addition to, or instead of, a contingent beneficiary that the proceeds get paid to the estate of the deceased insured. If that is the case, the proceeds become a part of the cash assets of the estate and are distributed to heirs in accordance with the Will. If there is no Will, the estate is distributed according to the laws of descent and distribution of the state in which the insured died. If none of the foregoing applies, and after having made a diligent search for the beneficiary(ies), the insurer pays the proceeds to the unclaimed property authorities of the state in which the insured last lived. This is a government agency, or bureau within an agency, and is often annexed to a department of insurance or the chief financial officer of the state. There exists a national organization of unclaimed property offices.
What if the beneficiary of a life insurance is deceased and no contingent beneficiary is named?
In the case where no beneficiaries are living when the insured dies then the proceeds of the policy will be paid to the estate of the insured and handled in the manner according to state law. If the insured had a will then that will specify where proceeds go and if no will is found state law will specify. If the insured had a very large estate then some of the proceeds may be subject to estate taxes as they become part of the estate.
Who can legally change the beneficiaries on a life insurance policy if the insured is deceased?
For the most part, no one. A court might make some changes, but those are most likely to be as a result of judicial proceedings taken prior to death, but even that does not contemplate post-death changes. A life insurance policy is a contract, and barring unforeseen circumstances, the insurer is obliged to pay the policy proceeds to the beneficiary(ies) named on the application for the policy when a valid claim for proceeds is presented. If the named beneficiary(ies) pre-decease the insured, the contingent beneficiary (if one has been named) get(s) the proceeds. If there is no contingent beneficiary, subject to the terms of the policy, the proceeds may be payable to the insured's estate. The proceeds would then pass according to the directives of the insured's Will, or if he/she did not have one, according to the jurisidiction's laws of descent and distribution (intestacy).
Who receives the benefits or money from a life insurance policy upon the death of the insured?
The beneficiary designated on the policy application is the recipient. Usually, a secondary ("contingent") beneficiary is also named in the event that the primary beneficiary dies before the insured. The estate of the deceased can also be the beneficiary if it is named as such or if there are no named beneficiaries or if all of them die before the insured. In that event, the insurance proceeds become a part of the estate and are distributed according to the insured's Last Will and Testament. If the insured dies without a Will, the estate, including the insurance proceeds, pass according to state law according to the laws of intestate succession.
When proceeds of a life insurance policy are paid into the estate of the insured?
I have written many policies where the beneficiary is listed as the "Estate of Insured". This is a common method of insurance planning but the client needs to have a will in order to direct where the funds are to go. Also "Trusts" are often funded with life insurance proceeds as methods of estate planning. An insurer may also pay proceeds to the estate of an insured if the named beneficiary dies before the insured and the insured does not name a secondary ("contingent") beneficiary. One of the big problems with proceeds being paid to the insured's estate is that, depending upon the amount of the insurance proceeds when added to other estate assets, is that the total may trigger an estate tax liability when one would not otherwise exist.
