When buying a life insurance policy you will be asked by the policy issuer who must the proceeds go to in the event of your death – like there is any doubt that you will die. Let’s face it – it comes to everyone – we just don’t always know when or get much warning.

So why make the policy out to a beneficiary -or “written in trust” if in the UK.

If your policy is nominated to pay out to a beneficiary,usually your spouse,significant other, surviving parents or kids, then the beneficiaries – if more than one, will recieve the policy proceeds a couple of weeks after you have died – providing they did’t have anything to do with pushing you off the edge. The money will come to them free of tax and estate duty and executor fees.

Your executor,banker,lawyer,local church or anyone else looking for a slice would prefer you to nominate your estate as the beneficiary. But if you do then the beneficiaries mentioned earlier will be the last in the payout queue.

First in the queue comes the executor and his fees – about 3-6%. Well someone must pay for his new mercedes. Next in the queue comes the tax man. The banker and lawyer will want their slice for moving the money around and all of this activity can take months if not years to resolve.

Meanwhile your wife,kids,parents and anyone else you were supporting while alive will simply be looking through the window and starving unless the executor chooses to make a mercy loan to them.

I have seen families go homeless and driven to the brink of destitution because the estate is tried up in tax and business loan disputes.

On the other hand – if your wife or kids are the nominated beneficiaries they get the money. The tax man will still have a go at the estate but if it is empty well – nothing much he can do. Can’t really pull you out of the hole and threaten you with a debt collector. Likewise the bank will simply have to write off the business debt unless secured by the surviving beneficiaries.

But even so – the life insurance money is in the hands of who it was meant for and they can decide what to do with it.

Related Blogs

• Colorado Designated Beneficiaries Press Conference | Law Advice
• How to Collect on Lost Life Insurance Policies | Feras.co.uk

Be Sociable, Share!

• 

Related posts:

1. Protect Your Family With Life Insurance
2. What Services Are Covered By a Burial Insurance Policy?
3. First Plan And Invest In The Life Insurance Policy For The Future.
4. Get The Right Life Insurance Policy Through The Best Life Insurance Quotes
5. 10 Key Reasons Why a Person Needs Life Insurance