How to find out if you’re a death benefit beneficiary, the process for filing a claim, and important information you should know.
There are a lot of different kinds of life insurance: A policy can be temporary, or last a lifetime. It can have a cash value component – or not. But the one defining feature shared by all life insurance policies is a death benefit. It’s the primary reason to get life insurance, and how policies are almost always described: when someone says they have a $100,000 policy, it really means they have $100,000 worth of death benefit insurance. This article will tell you more about:
To start, let’s define death benefit: It’s the money – lump sum or otherwise – that gets paid to your beneficiaries if you die while your life insurance policy is in effect. Whether you’re buying life insurance, or you’re filing a claim on a life insurance policy, there are a few things you need to know about beneficiaries:
An heir is a-sumed, but a beneficiary is designated. This means that if a person dies intestate (i.e., without a will), his or her heirs are the people who may be legally entitled to inherit the deceased’s estate – their spouse, children, and so forth1. One or more heirs are usually named as beneficiaries on a life insurance policy, but they don’t have to be. In fact, there are many reasons for naming someone other than your spouse or children as beneficiaries, including:
The most common reason people buy life insurance is to help protect their family’s financial well-being. That’s why married people commonly designate their spouse as the only primary beneficiary, especially when their children are still at home. However, if you live in a state with common property laws, you must name your spouse as the only beneficiary unless you have his or her consent to name someone else. One more thing: underage children can’t ordinarily be named as beneficiaries; if you want to leave money to a minor, you may have to set up a trust to manage the financial payout until they become of age.
When you buy an insurance policy, you can designate each beneficiary as either revocable or irrevocable. When beneficiaries are irrevocable, it can be difficult to remove them from policies or change their share without their consent. For revocable beneficiaries, the change process is relatively easy and you don’t need permission (unless it’s your spouse and you live in a common property state). For example, with Guardian, a beneficiary change can be done online in a few minutes by going to GuardianLife.com and signing in or registering for an account. Other life insurance companies may require a phone call or ask you to fill out a paper form and send it back. An annual review with your agent or financial professional can be a great time to ensure your beneficiaries are up to date.
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GST taxpayers can't claim any pending input tax credit if this return is not filed by November 30, 2024 for FY 2023-24
