There is no better way to protect your family when you are gone than to purchase a life insurance policy. Life insurance can look different depending on your circumstances and the policy that you purchase. But there is no way around it, life insurance is a must. While most people know that life insurance is necessary, many people don’t know how it works, or what the process looks like once you have passed away. Signet Insurance Group is here to talk about what the life insurance process looks like for your family members once you have passed away.
First Step is Filing a Life Insurance Claim
When you are going through the death of a loved one, it can be hard to fathom that the whole world doesn’t know of your loss. Whoever the beneficiary or beneficiaries of the life insurance are, will need to file a claim notifying the insurance company of the death. This is usually done by sending in the death certificate. When you have purchased a life insurance policy, it is incredibly important that you state clearly in your will who is the beneficiary of that policy. Make sure you let them know that you have put them down as the beneficiary. It is helpful to include not only the amount of the policy but the account number and name of the insurance company that the beneficiary will need to reach out to.
Who Can Be a Beneficiary of Your Life Insurance
There are a few ways that your life insurance policy can pay out.
– To the Estate: If you haven’t clearly stated who should get your life insurance policy when you die in your will, it will default to the estate. The executor of the will be able to carry out your wishes to the best of their ability, per your instructions.
– To a Beneficiary: When you state in your will who the beneficiary or beneficiaries are of your life insurance policy, the money can only be claimed by them. If they have passed away before you, the money will go their heirs.
– Into a Trust: Sometimes, you can set up your life insurance proceeds to be put into a trust that can be helpful in saving that money to give to beneficiaries at a certain time or age.
Life Insurance Proceeds & Taxes
Many life insurance beneficiaries are often concerned that they are going to have to pay taxes on the insurance proceeds that are rightfully theirs. The good news is that there is no taxes that are due on life insurance proceeds for your beneficiaries. This can come as a huge relief for all involved.
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If you are ready to purchase a life insurance policy that will give your loved ones financial stability after you pass away, you can rely on the professionals at Signet Insurance Group to help you find the best policy for your life circumstances. Call us today!
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