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Term Life Insurance Beneficiary

Before you can put together a certain policy, there is one important thing that you need to consider first – choosing a term life insurance beneficiary. Choosing an insurance beneficiary is probably a confusing thing to do. As a matter of fact, choosing a beneficiary is an interesting subject for many people. In addition, this subject can also raise eyebrows of consumers. Well, to help you with such query, I have included here in this article some essential questions with essential answers to help you become aware of this matter.

Can a beneficiary collect on the life insurance if he kills the insured?

Well, this question is probably inspired by many movies and television shows that pictures husband or wife killing his or her partner for the life insurance money. Is this scenario possible in the real life stage? Yes, it is – only if no one caught you. According to the common law implemented by the United States, you can not collect insurance if you killed someone “intentionally or feloniously”. Half of the fifty states of America have statutes that stop murderers in collecting life insurance benefits which are tied to their victims. However, in some states, one can kill himself and still has the privilege to receive benefits as long as you have been a holding the policy for a minimum of two years and that you don’t  have the plan to commit suicide when you have taken out that policy.

Who should you declare as your insurance beneficiary?

Whoever you wish to declare shall be the beneficiary of your life insurance. Just make sure to clearly state the name of your beneficiary and the right division of benefits each recipient gets. If you have designated a minor beneficiary, then you also have to designate a worthy custodian to handle until the beneficiary reaches the right age.

What if there is no declared beneficiary? In declaring a beneficiary for your life insurance, it is advisable to name at least three beneficiaries: the primary, the secondary, and the tertiary beneficiaries. This will prevent the case of a ‘dying intestate’.

Is it possible to ensure someone else without his knowing and declare yourself as the beneficiary? Life insurance of any significant value is not usually issued without a conducted medical examination of the insured and this is considered a tough way to strike it rich. In some states, there are exceptions for those who rely on other’s income to survive (insuring a mother who pays child support, for instance). Confidential insurance is also available for businesses.

Is a life insurance beneficiary required to pay insurance taxes?

It depends. For example, you have declared your 3.5 million – estate as the beneficiary, the government will most likely collect or claim up to 45 percent as tax. But if you have named someone else in your family as your beneficiary, the government can’t take any amount even when you have a hundred million worth of policy.

Hopefully this article on term life insurance beneficiary has been helpful in answering some of the questions you may have had. When taking out any policies ensure you have sufficient financial advice and ensure you know the terms and conditions before committing to anything.