| If you are the listed beneficiary on a life insurance | | | | that principal when you die. |
| policy, it is your responsibility to file a claim on the | | | | With the Life Income option, you can choose to |
| proceeds of the policy. In order to do this, you'll have | | | | receive an annual payment for the rest of your life. |
| to furnish proof that the insured is dead. This may | | | | The annual amount will be calculated based on the |
| seem trite at first, but life insurance companies are | | | | total death benefit and the amount of years you are |
| wise to protect themselves from fraud. | | | | expected to still live--this is known as "annuitizing" |
| Obtain as many copies of the death certificate as | | | | your payment. If you die before the total death |
| you can. If there is a funeral or cremation ceremony | | | | benefit is paid out the insurance company keeps |
| the director can help you get hold of these. In the | | | | what was left over. You can also choose a variation |
| rare case where there aren't any parting rites, | | | | on this, the Life Income with Period Certain. With this |
| contact the hospital or facility wherein or nearest to | | | | option you are guaranteed an income for the period |
| where the insured died. | | | | you choose (usually a multiple of five years). The |
| Next, contact the insurance company that | | | | longer the period the smaller the monthly or annual |
| underwrote the policy. Preferably contact the field | | | | payments. If you die before the period is up, another |
| agent who wrote the insurance if he is still with the | | | | beneficiary of your choice receives the remainder of |
| company. You will need to take the insurance policy | | | | the money. If you survive the payout period, |
| with you to the meeting and "surrender" it in | | | | payments stop and you'll need to rely upon another |
| exchange for the money due you, and of course | | | | income source. |
| you'll need ID to prove you are the person listed as | | | | A Joint And Survivor Life Income annuitization option |
| beneficiary. | | | | lets you vary this yet more, and annuitize the payout |
| It can take a quality life insurance company up to | | | | based on two or more beneficiaries, with the |
| two weeks to pay you the money as the claim must | | | | payments based on the death benefit plus the life |
| undergo investigation, although it's possible for you to | | | | expectancy of the beneficiary who is expected live |
| have your money within a couple days. Virtually | | | | the LONGEST. The payout continues to pass from |
| every time an agent of the company will deliver your | | | | beneficiary to beneficiary as one of them dies until |
| check or come do your payout paperwork with you | | | | the final one has died. |
| in person. | | | | WHAT TO DO WITH DEATH BENEFIT MONEY |
| PAYOUT OPTIONS | | | | The very first thing the majority of people do with |
| Most commonly, beneficiaries take a lump sum | | | | their death benefit proceeds--which are tax-free, by |
| payment. This is simply asking the life insurance | | | | the way (if taken in a lump sum)--is go on a vacation. |
| company to cut them a check for the grand total | | | | But this is likely not the wisest of actions. |
| amount of money the deceased was insured for, | | | | First, you should make sure all of the deceased's |
| known as the death benefit. But this is not the only | | | | debts are paid off, especially if it was your spouse. |
| payout option available, and the agent will want to | | | | Also be sure any funeral expenses are paid off. |
| know what option you're choosing. | | | | Next, use the money to pay off any debts of your |
| Another option that's not uncommon is that of | | | | own. If there isn't enough left to pay them all off, |
| Specific Income. With this you'll receive an equal | | | | pay off or pay down as much of them as you can. |
| amount of the total death benefit every year for a | | | | If you still have money left over, consult with a |
| stated period of years until it's all paid out. You can | | | | financial advisor about how to best invest it. But |
| choose a second beneficiary to receive the | | | | above all things, do not just go blowing the money |
| remainder of payments should you die before | | | | on things like vacations. |
| receiving all the money. | | | | A FINAL NOTE |
| Probably the most popular option after Lump Sum is | | | | Taking the lump sum payout is the best option for at |
| Interest Income. With this option the insurance | | | | least 80% of all beneficiaries. Using death benefit |
| company invests the death benefit for you and you | | | | money for some kind of income should never be |
| are paid the interest that the invested money earns | | | | considered without first talking to a financial advisor |
| but you aren't paid any of the principal. You can | | | | and your accountant. |
| name a beneficiary to receive a lump sum payout of | | | | |