Which provision of a life insurance policy?

Which provision of a life insurance policy?

The provision of a life insurance policy that dictates how the insurance company will pay out the death benefit is known as the beneficiary provision. This provision details who will receive the funds upon the insured’s death.

Related FAQs:

1. What is the difference between a revocable and irrevocable beneficiary?

A revocable beneficiary can be changed by the policyholder at any time, while an irrevocable beneficiary cannot be changed without the beneficiary’s consent.

2. Can I name multiple beneficiaries on my life insurance policy?

Yes, you can designate more than one beneficiary to receive the death benefit. You can allocate percentages of the benefit to each beneficiary.

3. What happens if my primary beneficiary passes away before me?

If your primary beneficiary dies before you, the death benefit will be paid out to the contingent beneficiary named in the policy.

4. Do I need to notify my beneficiaries that they are named in my life insurance policy?

It is recommended to inform your beneficiaries that they are listed on your policy, as it can help avoid confusion and ensure a smooth claims process.

5. Can I name a minor as a beneficiary on my life insurance policy?

Yes, you can name a minor as a beneficiary. However, it is advisable to designate a trustee to manage the funds until the minor reaches the age of majority.

6. How can I change my beneficiary on my life insurance policy?

You can typically update your beneficiary designation by submitting a beneficiary change form to your insurance company or through your online account.

7. What happens if I don’t name a beneficiary on my life insurance policy?

If you do not designate a beneficiary, the death benefit will be paid out to your estate and may be subject to probate.

8. Can a beneficiary contest a life insurance payout?

In some cases, beneficiaries may contest a life insurance payout, usually based on disputes over the policy’s validity or the insured’s mental capacity at the time of designation.

9. Can creditors go after a life insurance payout intended for a beneficiary?

In most cases, life insurance proceeds designated for a beneficiary are protected from creditors and not considered part of the insured’s estate.

10. Can I name a charity as a beneficiary on my life insurance policy?

Yes, you can name a charitable organization as a beneficiary on your life insurance policy to support a cause you care about.

11. What is the difference between a primary and contingent beneficiary?

The primary beneficiary is the first in line to receive the death benefit, while the contingent beneficiary only receives the benefit if the primary beneficiary is deceased.

12. Can a beneficiary be changed after the policyholder’s death?

No, once the policyholder has passed away, the beneficiary designation cannot be changed, and the payout will be made according to the last updated beneficiary information.

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