Affordable Life Insurance Protection for Your Family
If you are considering the purchase of a life insurance policy, you may be wondering where the money goes after you pass away.
This is a common concern, and definitely a question you should understand the answer to before buying your life insurance policy.
The money from life insurance is commonly known as the "Death Benefit".
The death benefit is the amount of life insurance, also known as the "Face Amount", provided by your insurance policy.
The death benefit money goes to the "Beneficiary" (or Beneficiaries) of your insurance policy.
The owner of the life insurance policy selects the beneficiary when purchasing the life insurance, and has the option to change beneficiaries after the policy is Issued – "In Force", providing coverage.
Who Receives the Death Benefit?
The beneficiary of your policy is the person (or persons) who receives the payout on your life insurance.
What is a Life Insurance Beneficiary?
A beneficiary of a life insurance policy is a person that will be paid a certain amount of money upon your death – the death of the "Insured Person".
Can I Change the Beneficiary of My Policy?
If you change your mind about who you want the death benefit to go to when you die, you can select someone else at any time during the life of the policy.
You would need to contact the insurance company and request a Change of Beneficiary form to be sent to you. To change beneficiaries on your policy, you complete the form, listing the new beneficiaries of your life insurance, and mail it back to the insurer.
Keep a copy of the completed change of beneficiary form for your own records.
When is the Death Benefit Paid Out?
The death benefit is paid out to the beneficiary after your death, once the beneficiary has contacted the insurance company, filed a claim by requesting and completing the necessary forms, and the insurance company has received the requested information, including your death certificate.
It usually takes the insurer about 14 to 21 days to review the information and send out a check for payout of your death benefit.
How is the Death Benefit Paid Out?
Beneficiaries may have several options to choose from as to how they receive the payout. Common payout options may include a Lump Sum, Annuity Payments, or a Checkbook with Interest paid on the account – from which the beneficiary may write checks.
How Long Does It Take for Beneficiary to Receive Death Benefits?
Once the insurance company has received all required documents from the beneficiary, the payout is usually received by the beneficiary within 10-14 days.
However, it depends on whether or not the insurance company decides they need to further investigate the claim to determine if there was coverage, or if there is an issue about how the insured died.
What is Life Insurance?
Life insurance is a contract between the insurance company and the owner of the life insurance policy.
The insurer agrees to pay out a death benefit upon the death of the insured person, in return, the owner agrees to pay premiums at regular intervals to the insurance carrier, throughout the life of the insurance policy.
Why Do People Buy Life Insurance?
The most common reason someone may purchase a life insurance policy is to replace the insured’s income for the family.
Many people get insured in order to provide financial security for the future of their loved ones.
The proceeds from a life insurance policy may be used for any purpose, including to maintain lifestyle, pay monthly bills, pay off a mortgage, pay of credit card debt, or provide funds for a child’s college education.
Life Insurance Beneficiaries Need to Know
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