{"id":1007,"date":"2022-09-01T19:12:17","date_gmt":"2022-09-01T19:12:17","guid":{"rendered":"http:\/\/gpswp.com\/bradyassetmanagement-2\/?p=1007"},"modified":"2024-02-02T23:06:26","modified_gmt":"2024-02-02T23:06:26","slug":"life-insurance-basics-you-should-know","status":"publish","type":"post","link":"https:\/\/gpswp.com\/bradyassetmanagement-2\/2022\/09\/01\/life-insurance-basics-you-should-know\/","title":{"rendered":"Life Insurance Basics You Should Know"},"content":{"rendered":"\n\n

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Many people use life insurance as a safety net that will allow family members to pay bills, go to college, or support a business in case of the insured\u2019s untimely death.<\/strong><\/p>\n\n\n\n

Ultimately, the thinking is, if you\u2019re the beneficiary on a life insurance policy, you could have some degree of protection for your financial future.<\/p>\n\n\n\n

Life insurance is a topic that you may feel you know at least a little bit about, but if you\u2019re like many people, once you dig a bit below the surface you can encounter some things that are a little more complicated. A recent Forbes article, \u201c10 things life insurance beneficiaries should know\u201d1<\/sup> shared some things that may be beneficial for beneficiaries to know.<\/p>\n\n\n\n

One of the first things a beneficiary should know is that they don\u2019t need a physical copy of the policy to make a claim. This is an especially important point because after someone you care about has died, the last thing you need is the stress of trying to track down life insurance paperwork. After all, many people typically purchase a life insurance policy years before their passing, which just increases the likelihood of a policy getting lost in the shuffle. <\/p>\n\n\n\n

If you\u2019re the beneficiary of a life insurance policy, you only need to know the name of the life insurance company. From there, you can reach out and inform them that a customer has died, and then they\u2019ll provide you with a claim form. <\/p>\n\n\n\n

While you won\u2019t need the actual policy to file a claim, you will need to provide the life insurance company with a certified copy of the policyholder\u2019s death certificate. Once you have the claim form, you should attach the death certificate to it. From there, you\u2019ll be ready to submit the necessary paperwork to make your claim.<\/p>\n\n\n\n

Another thing that beneficiaries should bear in mind is that a life insurance payout is tax-free. You read that right: Life insurance benefits are tax-free for the designated beneficiary, no matter how large the payout amount is. You don\u2019t have to report life insurance proceeds as income unless the policy was transferred to you for cash or other \u201cvaluable consideration,\u201d which does not apply to most beneficiaries.1<\/sup><\/p>\n\n\n\n

There are several different types of life insurance policies, which leads to another of the basics you\u2019ll want to keep in mind: It\u2019s possible that a beneficiary might not get the full policy face amount. If the policy was a cash value life insurance policy, and the policy\u2019s owner took withdrawals against the cash value or loans that weren\u2019t paid back, the life insurance company will reduce the payout amount accordingly.1<\/sup><\/p>\n\n\n\n

Let\u2019s say the policy in question had a face value of $1 million, but the policy owner took a $50,000 loan from cash value and neglected to pay it back before their death. The life insurance payout will be reduced accordingly by $50,000, plus any loan interest. And, since a beneficiary may not even know about the policy, let alone the policy\u2019s owner\u2019s actions, this might come as quite a surprise.<\/p>\n\n\n\n

That\u2019s just one example of how the specifics of a life insurance policy can impact the beneficiary\u2019s payout. If you\u2019re unsure about your life insurance policy or you want someone to walk you through your options, it can be a great idea to start with a financial services professional.<\/p>\n\n\n\n

Life insurance policies can be part of a wide-ranging retirement strategy that keeps your legacy in mind.<\/p>\n\n\n\n

1 <\/em>https:\/\/www.forbes.com\/sites\/advisor\/2020\/06\/26\/10-things-life-insurance-beneficiaries-should-know\/<\/em><\/a><\/em><\/p>\n\n\n\n

Please keep in mind that life insurance typically requires health underwriting and, in many instances, financial underwriting.  Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.<\/em><\/p>\n\n\n\n

Exclusive rights to this material belongs to GPS. Unauthorized use of the material is prohibited.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Many people use life insurance as a safety net that will allow family members to pay bills, go to college, or support a business in case of the insured\u2019s untimely death. Ultimately, the thinking is, if you\u2019re the beneficiary on a life insurance policy, you could have some degree of […]
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