At first glance, life insurance seems like a fairly simple process. The policyholder applies for insurance with a specified death benefit, and, after he or she dies, the beneficiary or beneficiaries will receive this benefit in full. However, this is not always the case.
When someone purchases life insurance, he or she must have an “insurable interest” in the insured. This means that the policyholder, i.e. the person who owns the policy and names the beneficiary or beneficiaries, will suffer financial loss if the insured dies unexpectedly. It is important to remember that this sort of relationship only needs…
For the most part, the process of naming beneficiaries to a life insurance policy is the same across all states. In fact, unless prohibited to do so by law, anyone can be named as beneficiary to a life insurance policy, regardless of whether he or she has any vested interest in the insured. Understanding the…
After facing a loved one’s death, life insurance can help provide necessary financial security to pay for funeral expenses and supplement lost income. In most cases, when someone takes out life insurance, he or she lets the named beneficiaries (often family members of the insured) know about it. That way, when the policyholder dies, the…
When purchasing a life insurance policy, the policyholder aims to provide an extra layer of financial protection and peace of mind for their loved ones. However, since life insurance companies are incentivized to minimize risk, they will frequently look for reasons to cancel a policyholder’s coverage. This can put their financial security at risk and…
A “spendthrift trust” is a form of trust meant to protect the heir of an estate from creditors. A trust is created when an individual puts money aside to be managed, invested, and distributed by a trustee.
National life insurance law firm, Boonswang Law, explains who gets money if the beneficiary is deceased, dies soon after or at the same time as the insured, dies while the claim is under review, or if the life insurance beneficiary designation is otherwise invalid.
What if someone dies soon after getting life insurance? If you pass away soon after purchasing life insurance, your beneficiary could face delays or even a denied claim.
When an insurer denies a claim because the policy lapsed, many families assume there’s nothing they can do. That isn’t always true. Insurers have to follow specific rules before they can end a policy for nonpayment, including grace periods and written notices that most states require. When an insurer skips a step, the lapse may…
Life insurance is a contract between the insured and the insurance company. For a contract to be legally enforceable, both parties to the contract have to agree to the same things. For example, if an insurance company believes it is providing insurance for a non-smoker but is really insuring someone who smokes a pack a…
