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 Posted: Sun Jan 03, 2010 3:13 am Post subject: Life insurance payout |
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Yes, i was wondering if anyone would be able to tell me, how an insurance company comes up the amount of money the beneficiaries are paid?
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ForeverYoung82
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| Posted: Sun Jan 03, 2010 4:29 am Post subject: |
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It is the amount that is still in force upon death of the insured....can you elaborate on your question a bit? Is this for a term insurance policy, or are you trying to find out how they calculate something like paid-up additions on a whole life policy?
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dgoldenz
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| Posted: Sun Jan 03, 2010 4:41 am Post subject: |
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my mother had basic life insurance as well as supplemental life insurance. as i'm filling out the claims report, it states on there, final determination payment, will be decided by the insurance company. I wanted to know how they calcuate the amount to give the beneficiaries.
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ForeverYoung82
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| Posted: Sun Jan 03, 2010 8:46 am Post subject: |
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ForeverYoung82, the insurance company will deduct for any policy debts (loans, interest, etc) outstanding before mailing the payment to the beneficiary listed on the policy.
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InsInvestigator
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| Posted: Sun Jan 03, 2010 2:42 pm Post subject: |
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ForeverYoung82 . . .
There will probably also be some taxable interest added by the insurer to the death benefit payable, calculated from the date of death. Most state insurance laws require the payment of interest on death benefit proceeds in this manner. The (annual) interest rate is typically 3-4%. In spite of state laws, a few insurers don't if they make the payment within 30 days of death. California requires 10% interest (from day 1) if the claim is not paid within 120 days of the submission of a claim form.
Don't forget that you'll need to supply an original certified (or informational) copy of the death certificate. It will not be returned unless you request them to do so.
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MaxHerr
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| Posted: Mon Jan 04, 2010 4:17 am Post subject: |
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The amount is whatever amount was signed up for/purchased. You posted this on another forum with more information disclosed. The amounts that you discussed there should be the payout. As MaxHerr has pointed out, there could be a slight degree of interest paid as well depending on the amount of time that goes by between the submission of the form and the money coming to you.
Money coming to you will most likely be in the form of an account that you'll be given the ability to draw checks against. These accounts generally pay a pretty good interest rate, so leaving some money in there for a little while isn't always so bad--it is taxable interest though, so be aware of that, you'll receive a 1099 at the end of the year. |
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