Life Insurance Proceeds
Life Insurance Proceeds
LIFE INSURANCE PROCEEDS
Since life insurance proceeds generally contain beneficiarydesignations, these must be integrated with the provisions inthe Will. There is no real conflict in this area, since the Willserves the function of disposing of property not otherwisedisposed of by arrangements made during your lifetime. A lifeinsurance policy is one such arrangement as is, for example, atrust or a joint ownership of property.
In other chapters of this book, the question of the ownership of the life insurance policy by you as the insured, or byanother personin order to remove it from your estatewill be considered. Assuming for the present, however, that theinsured is the owner, how are the proceeds of the life insurance to be integrated with the assets passing under the Will?
If the life insurance policy names the estate as the beneficiary, there is a complete integration. This has the effect ofmaking the life insurance distributable under the terms of theWill. However, this will increase the taxable estate both underthe Internal Revenue Code, and under the tax laws of moststates.
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Where a personal beneficiary is named, there are still anumber of problems to be considered. Is the beneficiary toreceive the proceeds in one lump sum? This may be a dangerous practice if there is any risk that the beneficiary will havedifficulty in managing money. A housewife who has managedvery well on a husband's salary may encounter difficulty whenshe is faced with the problem of a comparatively large investment, particularly if problems in investment were handledexclusively by her husband during his lifetime. Many wives donot particularly care about their husband's investments, anddo not want to be bothered with talk about stocks, bonds, mortgages, or other financial matters not relevant to the payment of immediate bills and solving immediate householdproblems.
Life insurance proceeds may be left for a beneficiary under any one of the option settlements offered under the insurancecontract. Life insurance option settlements are an additionalexception to the "terminable interest" rule. Here, however, the question arises whether leaving money on deposit with aninsurance company is the most effective form of investment. Ifthis is done, there is another dilemma: whether to give thebeneficiary a lump cash sum with its attendant risks, or toleave the proceeds with the insurance company and to defeatthe possibility of investment growth. Just How Much Money Life Insurance Charges Simple Lifestyle Changes That Can Make You Feel Like New Applying Online for No Exam Life Insurance Ohio Life Insurance Quotes Life insurance- Plan yourself financially Life Insurance Is Amazingly Important Umpteen Gadgets For Modern Life Children's Sermons: Life Isn't Fair Make Smoking Cessation Aids Be More Useful With The Assistance Of Lifestyle Adjustments What a Successful Life and Successful Online Diet Plans Have in Common Payday loan- money crunch can't affect your lifestyle Benefits Of Life Insurance Effects Of Cartoon Network On Children Life