by Insurance Expert » Thu Jul 30, 2009 03:54 am
There have been quite a few posts with this subject.
Many people have been saying that if there is not a named beneficiary, the proceeds get paid to the estate.
I chimed in and said that a policy could have a default beneficiary. I also said that I thought that most policies don't have a default beneficiary.
Anyway, I sold two policies today from two different companies and both of them on the application said what would happen to the money if no beneficiary was alive. In neither case would the money go directly to the estate.
Many people have been saying that if there is not a named beneficiary, the proceeds get paid to the estate.
I chimed in and said that a policy could have a default beneficiary. I also said that I thought that most policies don't have a default beneficiary.
Anyway, I sold two policies today from two different companies and both of them on the application said what would happen to the money if no beneficiary was alive. In neither case would the money go directly to the estate.
Posted: Tue Aug 11, 2009 05:42 pm Post Subject: Point taken, Expert. :)
This is the only thing I have found so far. And according to this, whether or not a policy can have a default beneficiary is on a policy to policy basis.
"In most instances, if the designated beneficiary does not survive the insured, then the proceeds become payable to the contingent beneficiary. If there is no surviving contingent beneficiary, payment would then be determined by the terms of the policy. Please read the applicable provisions of the policy. If the designated beneficiary survives the insured, but dies before the claim is made, the proceeds may be payable to the designated beneficiary's estate."
Posted: Tue Aug 11, 2009 05:57 pm Post Subject: no beneficiary
It seems pretty clear to me that unless your policy specifically states otherwise, your insurance proceeds will go to your estate if there is no beneficiary listed and still living. In fact, I can't find anything to the contrary.
Beneficiary Clause
The main aim of life insurance is to transfer wealth to your heirs or to provide liquidity to your family. For that reason, you need to name a beneficiary who will receive the life insurance proceeds after your death. This beneficiary can be your spouse, children or relatives. You also can change your recipient's name any time during the term of the policy.
However, if you still have not nominated a beneficiary, then your family is going to be in some trouble. The insurance money will go to your estate and the probate fees needed to settle your estate can dig a big hole in your surviving family's liquid assets. (For related reading, see Update Your Beneficiaries, The Importance Of State And Contingency Planning and Getting Started On Your Estate Plan.)
Posted: Tue Aug 11, 2009 07:26 pm Post Subject:
This is the only thing I have found so far. And according to this, whether or not a policy can have a default beneficiary is on a policy to policy basis.
"In most instances, if the designated beneficiary does not survive the insured, then the proceeds become payable to the contingent beneficiary. If there is no surviving contingent beneficiary, payment would then be determined by the terms of the policy. Please read the applicable provisions of the policy. If the designated beneficiary survives the insured, but dies before the claim is made, the proceeds may be payable to the designated beneficiary's estate."
Everybody seems to be in agreement with this except Gary. Gary believes that in the state of Florida the applicable terms of the policy are irrelevant when there is not a surviving beneficiary or contingent beneficiary.
Posted: Tue Aug 11, 2009 07:35 pm Post Subject:
It seems pretty clear to me that unless your policy specifically states otherwise, your insurance proceeds will go to your estate if there is no beneficiary listed and still living. In fact, I can't find anything to the contrary.
There's a couple of issue here. 1) Many* policies will specifically state what happens if there isn't a living beneficiary or contingent beneficiary. 2)It doesn't make sense for a policy to go to the insured's estate if the insured is not also the owner of the policy. It makes much more sense for the policy to go to the owner of the policy if the owner is living or the owner's estate if dead. An insurance policy is not an asset of the insured. It is an asset of the owner.
Where did you get that beneficiary clause from that you posted?
*Quite frankly, I don't know if "many" is the majority of policies, most policies, or all policies.
Posted: Tue Aug 11, 2009 08:09 pm Post Subject: I found it on this website Expert
http://www.investopedia.com/articles/pf/06/lifeinsuranceclauses.asp
Posted: Tue Aug 11, 2009 09:09 pm Post Subject:
Thanks. If you would have quoted a little further, this would have been included:
Preference Beneficiary Clause
If you have not nominated a beneficiary in your policy, your insurance company will disburse the life insurance money to the individuals listed in your policy. Presume that the order of priority in your policy is: 1) your spouse, 2) your children, 3) your parentts. If the proceeds are distributed, they will go the first living individual which, in most cases, will be your spouse. (To learn more about changes to beneficiary status, see Problematic Beneficiary Designations - Part 1, Part 2 and The Importance Of Sept 30 For Multiple Beneficiaries.)
Posted: Tue Aug 11, 2009 09:20 pm Post Subject: Great
It looks like this riddle is solved then! What's next? :)
Posted: Tue Aug 11, 2009 09:48 pm Post Subject:
I just don't get the argument.... :? 'IF' a policy has a default beneficiary claus, then that is how the policy is paid out...'IF' it does not, then it would go to the estate and be probated...are we not all (except Gary :roll: ) saying the same thing? Have we not ALL (except Gary) provided links proving this point?
Gary, we all agree IF NO default beneficiary claus is in the insuring contract then yes, it goes to the estate...BUT you said all policys all the time..and that's just not correct.
Posted: Tue Aug 18, 2009 09:09 am Post Subject:
Have we not ALL (except Gary) provided links proving this point?
Excuse me missy...I have provided the Florida Law that states exactly how the proceeds are paid when no beneficiary is named.
...and you may want to actually read a linky every now and again...
DID YOU READ THE LINKY PROVIDED BY mswatson27?
Here's what it says:
However, if you still have not nominated a beneficiary, then your family is going to be in some trouble. The insurance money will go to your estate and the probate fees needed to settle your estate can dig a big hole in your surviving family's liquid assets.
Then is says:
If you have not nominated a beneficiary in your policy, your insurance company will disburse the life insurance money to the individuals listed in your policy. Presume that the order of priority in your policy is: 1) your spouse, 2) your children, 3) your parents. If the proceeds are distributed, they will go the first living individual which, in most cases, will be your spouse.
Now what’s written above is exactly contradictory to the first statement, isn’t it?
Dear Lori et al,
Gary says, the above is convoluted bllsht. State LAW controls the disposition of life insurance funds.
I’ve asked all of you many times now to PROVIDE THE STATE LAW that supports your opinion. I’m the only one so far that has provide the Florida State Law on this issue.
A beneficiary designation in a life insurance policy or an annuity contract is a superior designation that CANNOT be defeated by Will or Trust or any other proceeding.
If the beneficiary designation is left blank the proceeds are paid to “The ESTATE” of the dead Insured/Owner.
PERIOD.
END OF STORY.
PLEASE provide any state’s STATE LAW to the contrary that says if the life insurance beneficiary is left blank the INSURANCE COMPANY, by way of THEIR OWN preference clause decides who get the money.
PLEASE take me to school on this one!
Posted: Tue Aug 18, 2009 10:23 am Post Subject:
Gary, It's illegal to eat cake and ice cream at the same time in the state of Florida.
State law controls what combinations of food we can eat.
PLEASE provide any state's STATE LAW to the contrary that says that the cake and ice cream company by their own rules can decide that the combination can be eaten together.
PLEASE take me to school on this one.
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