The beneficiary should get a claim form from the insurance company. The insurance company will need, the name of the insured, a policy number and a certified copy of the death.

The beneficiary will have choice of ways to receive a death benefit. Settlement options could include the following:

• A lump sum payment
• An installment payment usually with interest
• A checking account where the beneficiary receives a check book and can withdraw money when need
• The insurance company could hold the benefits and pay interest

You generally do not have to pay income tax on death benefits.

Get advice from your lawyer or account on this matter.

It is illegal for a stranger to take out an insurance policy on your life. The stranger has no insurable interest and could have an unhealthy desire to see you die sooner than nature intends, so that his can collect the death benefit.

A life insurance policy is like anything else, if you own it, you can sell it, even to a perfect stranger who has no conceivable insurable interest, who then becomes the policy owner and can then name himself as the beneficiary.

There are Viatical Insurance Buyers and Sellers of life insurance policies and they call themselves viatical settlement firms. The viatical firm buys insurance policies from people with terminal illnesses and sells them to investors.

This provision may be built into the policy or offered as a rider. It is intended to let you use death benefits to pay hospital or medical bills connected with terminal illness. It will require that you must have your “terminal illness” backed up by a doctors prediction that you will die within a set period of time. The amount of time will be specified in the policy. The policy may limit the dollar amount you can take out.

If you accelerate and use the death benefit, there will be less left in the policy for your family or other beneficiaries when you die.

Mortgage Life Insurance is sold by insurance companies. It is called mortgage insurance but it is really a decreasing term life insurance that will pay off your mortgage if you die. You buy mortgage life insurance to protect your survivors from having to pay the mortgage.

The premium is structured where the policy begins with a death benefit that is equal to your current mortgage balance. The death benefit decreases at the same rate as your mortgage balance. The premium payments never change but may stop prior to the loan payment. The lender may agree to add the premium payments to your monthly mortgage payment.

The typical “funeral policy” is a whole life policy with a small death benefit for about $5,000.00

There is an alternative to funeral insurance if your concern is paying funeral expenses. The traditional alternative is a pre-need contract with a funeral director. Here is how it usually works:

1. The funeral director contracts to provide a funeral for a specified amount.

2. Your payments go into an escrow fund

3. The money remains yours

4. Unlike life insurance, you can withdraw your money from the pre-need escrow fund.

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The advantages to Universal Life Coverage are the policy has the potential for cash value to earn more than the minimum interest rate. Also the premium amounts and death benefits are flexible. You may be able to change the amount of your payments or your death benefit after you buy the policy. You can also increase your coverage by paying larger premium but you will be required to answer health questions or get a physical to increase the benefits on your policy.

It is possible that the cash value could grow faster than is needed to pay the cost of insurance. In most cases the policy holder can choose how that money is used. Talk to your agent about the options that are available.

Your Universal Life Insurance policy has 2 death benefit options:

1. Level death benefits is equal to the policy’s face value

2. Increasing death benefit is equal to the policy’s face amount plus the policy’s account value. The premiums will be higher for option 2.

Read and understand your policy.

If the insured person dies during the term, the death benefits will be paid to the beneficiary. It is the most inexpensive way to purchase a death benefit on the coverage amount.

Because Term Life is a pure death benefit, its use is to provide for covering financial responsibilities to the insured such as: to cover consumer debt, dependent care, college education for dependents, funeral costs and mortgages.

Variable universal life is also considered to be a type of permanent life insurance, because the death benefit will be paid if the insured dies any time up until the endowment age (typically 100), as long as cash value of pay the costs of insurance in the policy.

Variable universal life insurance receives special tax advantages in the United States IRS code. The cash value in life insurance is able to earn investment returns without incurring current income tax as long as it meets the definition of life insurance and the policy remains in force.

This Insurance is relatively for wealth people who give money to their children.