What Does It Mean To Be A Beneficiary Of A Life Insurance Policy?
What is a beneficiary
Life insurance is an essential part of any financial plan for many reasons. Many policyholders rely on the death benefit of their life insurance policy to support loved ones. A beneficiary is someone you name in a life insurance policy to receive the death benefit. Beneficiaries are usually those who financially depend on the policyholder and would need support if the policyholder died.
What if you do not have beneficiaries
Life insurance is an expression of love and caring for those closest to you. However, what happens if you no longer have a beneficiary? Depending on your estate’s assets, where you live, and whether distant relatives can be located, the entire estate could go to the state. An excellent option for life insurance policyholders aged 70 and older, terminally ill, or chronically ill is a life settlement. A life settlement is the sale of a life insurance policy. Upon closing, policyholders receive a cash payout that is less than the death benefit but more than the cash surrender value and eliminate any future premiums. By collecting the cash payout, policyholders without beneficiaries can put the money to good use while they are alive.
What if your beneficiaries need money now
When you opt for a life settlement, there is no regulation for how to use the funds. If you find that your beneficiaries could use financial support, it might be a good idea to sell the policy now for cash install of having your loved ones wait for the death benefit. Life settlement payouts are higher than the policy’s cash surrender amount and help policyholders pay off debts that could later burden their families.
The life settlement specialists at MRE Finance can help you sell your life insurance policy for a lump sum cash payout. Call us today to get started or get a free estimate to see what your policy could be worth.