A Non-Commissioned Agent Can Help You Find the Best Life Insurance

Life insurance is a form of protection that pays a death benefit when the insured dies. It’s available to almost everyone and is easy to purchase. A non-commissioned agent can help you find the best policy for your needs.

You can buy a policy with a fixed term or for your entire life. You can also choose to add contingent beneficiaries who will receive the payout if your primary beneficiary dies. To learn more, visit https://www.nicholsoninsurance.com.

A life insurance policy is a contract between the insured and an insurance company that pays a death benefit to the beneficiary if the insured dies. The amount of the death benefit is called the face value and may be fixed or variable, depending on the type of policy. The insured can pay premiums for a specified period or for their entire lifetime. Some policies also have a graded death benefit, which means that the insurance company will only pay a certain percentage of the face value in the first year or two.

Beneficiaries can use the death benefit to cover a variety of expenses. These can include medical bills, funeral costs, loan repayments, education, debts, and day-to-day expenses. The death benefit is tax-free, and beneficiaries can choose how to receive the money. Some beneficiaries opt for a lump sum payment, while others prefer a specific income payout or annuity payments for a specified time.

Many people purchase life insurance to make sure their loved ones will be able to meet their financial obligations after their deaths. For instance, parents with children who are still minors may need to buy life insurance to cover their child’s future care costs. This can ensure that their children will have enough income to live comfortably until they are old enough to support themselves.

If a death claim is filed, the insurance company will notify the beneficiary of the death benefit. They will then send a check to the beneficiary, usually by certified mail. Some beneficiaries choose to have the death benefit deposited directly into their bank accounts. Others may prefer to have the proceeds placed into an interest-bearing account and receive monthly or annual payments in a fixed amount until they are depleted.

It’s tax-free

Whether you want to pay for your child’s future college education, secure a retirement fund for your spouse or simply ensure your family’s financial security after your death, life insurance can help. It’s a valuable tool that offers peace of mind and helps your beneficiaries achieve their goals in a tax-efficient manner.

Permanent life insurance policies (whole life, universal life and index universal life) typically offer a savings component that offers tax advantages not available in other investments. The cash value that accumulates in your policy can be accessed tax-free, and interest earnings are tax-deferred until you withdraw them. In addition, some life insurance policies allow you to take a tax-free loan on your policy’s cash value, as long as the loan is repaid in full. This type of strategy may be appropriate for your situation, but you should consult with a financial professional and a tax advisor to learn more about this option.

In most cases, the death benefit is tax-free for your beneficiaries. However, there are a few instances in which the life insurance payout may be taxable. The most common is when a life insurance contract changes ownership for cash or other consideration. This change in ownership triggers a transfer-for-value tax rule, which may affect the portion of the payout that exceeds the cumulative premiums paid.

Another instance in which a life insurance payout may be taxable is when a beneficiary receives the death benefits in installments. The amount that is rolled into an estate may be subject to federal and state inheritance taxes, but this depends on the specific circumstances.

It’s personal property

A life insurance policy is personal property and as such it can be sold or transferred to another person. Just like other personal property, such as cars or furniture, a life insurance policy can be given as a gift. However, this type of transaction must be carefully planned. For example, some personal property policies have sub-limits that limit coverage for items with high value, such as art, jewellery and collectibles. To protect these high-value items, an insured may want to consider scheduling them under a separate policy or add an endorsement. Also, some policies allow the applicant to bind coverage during the underwriting process with a payment that will either be returned or credited toward the first premium after approval.

It’s contestable

In life insurance, the insurer must be provided with accurate information when applying for a policy. In order to verify this information, the applicant will be asked a number of questions and will be required to take a medical exam. If the policyholder misrepresents information in their application, the insurance company can rescind the death benefit. This process is known as the contestability period, which lasts for two years after a life insurance policy is issued.

While minor mistakes do happen, it is important to be honest with your insurance company when applying for a policy. Even though a lie is considered fraud, it’s not always an issue of life insurance. In fact, most life insurers do not deny claims due to fraud if the claim is made within the first two years after the policy is issued. However, if the beneficiary of the policy is investigated by the life insurance provider for a reason other than fraud, then the claim may be denied.

The insurance provider will conduct an investigation into the claim and review medical records, a copy of the death certificate, and other relevant documentation. This is a necessary step to ensure that the life insurance policy is valid and that the insured has not committed fraud.

However, the insurance company will not rescind the policy for simple errors, such as forgetting to name a medication on the application. These errors can be corrected after the contestability period has passed, but it’s best to be as honest as possible when filling out an application. This will help your beneficiaries avoid being disappointed when they file a claim. If you find that you are facing a life insurance dispute, contact an attorney to assist you.

It’s lapsed

When a life insurance policy lapses, it no longer provides its death benefit or any other benefits. A lapsed life insurance policy can also lead to serious legal complications for beneficiaries. Fortunately, most insurance providers offer a grace period for when a premium payment is missed. During this time, the insurance company is still required to review beneficiary claims. However, the outstanding premium must be paid plus any late fees before the policy can be reinstated. The amount of the premium due will vary by insurer and policy type.

Although a lapsed life insurance policy can be reinstated, it can be costly and time-consuming. The insurer will typically require that the policyholder provide proof of insurability and undergo a new underwriting process. Moreover, the insurer may charge a higher premium for a new policy to cover the cost of the lapsed one. In addition, the policyholder will likely have to pay the outstanding premium plus interest for a reinstated life insurance policy.

Many people avoid letting their life insurance policy lapse by ensuring that they pay their premium on time. In order to do this, they should choose a bank account that can be debited automatically and keep their contact information up-to-date with the insurance carrier. Additionally, they should make sure that they open correspondence from their insurer right away.

Life insurance companies are legally required to notify their customers when they have missed a premium and that the policy is in danger of lapsing. If a person fails to pay their premium within the grace period, their life insurance will lapse and they will not receive any death benefit when they die. Fortunately, most life insurance policies can be reinstated if the premium is paid before the end of the grace period.