When the topic is a Life Insurance policy, we tend to consider the worst-case scenario to build a plan. It sounds uncomfortable, right? Well, in some cases, that might be a fair statement.
But wouldn't it be worse if you didn't have a plan in place in case something unfortunate happened?
To demystify the shadows that hover Life insurance, we will cover some of the most frequently asked questions about this subject.
1) What kind of things does life insurance cover?
Life insurance can be used to cover a worthwhile variety of common expenses, like:
· Co-signed debt, including student loans
· College expenses for the kids
· Living expenses for your family
· Stay-at-home labor expenses (cooking, cleaning, etc.)
· Burial expenses
· Loans from family members
· Estate taxes that your heirs must pay for other assets
2) What is a beneficiary?
The beneficiary is the person or entity named as the recipient of your policy’s death benefit. It can be a family member, a person unrelated to you, or even a business or other organization. You choose the beneficiary on your own — you don’t need permission from the insurer or the beneficiary. You can also choose more than one beneficiary and designate how you want the death benefit to be split among them, and name contingent beneficiaries in case the primary beneficiaries predecease you.
Your insurer will automatically disburse the death benefit if you die, but it’s still a good idea to tell any beneficiary about the policy so they will be prepared to take action should a problem arise. For this same reason, it’s also a good idea to provide the beneficiary with access to the contract.
3) Does a beneficiary need to do anything to receive the death benefit?
Technically a beneficiary does not have to do anything to receive your policy’s death benefit, but it’s a good idea to make sure he or she is aware that the policy exists in case there are any delays or complications on the insurer’s side.
The insurer will require proof of death and a copy of the contract in order to disburse the benefit.
4) What happens to the money I pay into a policy if I outlive the coverage term?
If you outlive your term life insurance, the policy expires and you do not receive a refund of premiums paid. You may have an option to convert your term policy into a permanent policy after it expires.
5) Is the death benefit taxed?
The death benefit is not usually taxed under normal circumstances. If you’re doing something less common like selling the policy to a third party or distributing the death benefits in installments while the principal earns interest, there might be tax penalties for the beneficiary. There may also be estate taxes if the death benefit is included in an estate instead of paid directly to the beneficiary. Be sure to check with an accountant or financial advisor to make sure.
Because we understand the difficulty of this decision plus the complex world of Insurance in the United States, EPIA will help you navigate this process so that you don't have to. And you can start preparing for this safe future today!
We offer a free policy review to find the best coverage out there!
Don't wait any longer to safeguard your loved ones - request your quote today at www.ppo-hmo.com/life-insurance.
Source: Policy Genious
EPIA inc. is a private Insurance Agency with no ties with legal entities. The information contained in this article is based on information provided by the Policy Genious Official Website. EPIA attempts to ensure that all material is up-to-date therefore is not responsible or liable in any manner for any errors or miss information announced on its main sources.