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 Posted: Thu Jul 16, 2009 7:57 pm Post subject: important life insurance question |
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| When someone dies and and has a life insurance policy,but unfortunatly there is no named beneficiary, where does the money go? Or who does the money go to? Would the surviving spouse get it, would the sole surviving only child get it, who is a minor(child does not belong to surviving spouse)Or would the money go into something to be divided between the 2? This is happening in Illinois. Any response is greatly appreciated, sooner the better. Thank You |
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bjamm1972
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| Posted: Fri Jul 17, 2009 2:15 am Post subject: |
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Good question.. I think as per the law it goes to the nearest blood relative... Parents ==> Siblings
If there are no Siblings==> it goes to relatives
If there is more than one person, the money gets divided..
Guys correct me if I am wrong! |
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DV360
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| Posted: Fri Jul 17, 2009 2:21 am Post subject: |
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design360 said:
| Quote: | Good question.. I think as per the law it goes to the nearest blood relative... Parents ==> Siblings
If there are no Siblings==> it goes to relatives
If there is more than one person, the money gets divided..
Guys correct me if I am wrong! |
You are being corrected.
In the absence of a named beneficiary, the proceeds from a life insurance policy are paid to the estate of the insured. That's it. Life insurance proceeds are not subject to state estate transfer rules as are last will and testament situations.
The death benefit will be paid to the insured's estate and will then be distributed according to state law.
InsTeacher 
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InsTeacher
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| Posted: Fri Jul 17, 2009 6:23 pm Post subject: |
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I didn't realize it was even possible to 'not' name a beneficary...is it? Or do you reakon what typcially would happen in cases like this (no beneficary) are that the beneficary pre-deceased the policy holder, and no contingent was named?
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Lori
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| Posted: Fri Jul 17, 2009 7:04 pm Post subject: |
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Typically, it's not possible to not name a beneficiary. However, this really depends on the insurance company. In other words, if someone applies for insurance and does not name a beneficiary, the insurance company often won't approve the policy. This is up to the insurance company, so they could choose to approve it.
Without a named beneficiary, a policy doesn't automatically get paid to the estate. An insurance policy is a contract. The contract can state specifically what will happen if there is no named beneficiary. That being said, it will typically go to the estate. |
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InsuranceExpert
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Pirate91
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| Posted: Fri Jul 17, 2009 7:43 pm Post subject: |
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| Quote: | | Typically, it's not possible to not name a beneficiary. However, this really depends on the insurance company. In other words, if someone applies for insurance and does not name a beneficiary, the insurance company often won't approve the policy. |
That was my thought, isn't there supposed to be some (ill) affect to the beneficary if the named insured dies? I'm quite surprised to hear that a policy could pass the UW without one named. Again, though I can certainly understand how this 'accidentally' happens (ie bene. dies before the named insured) | Quote: | | doesn't automatically get paid to the estate. An insurance policy is a contract. The contract can state specifically what will happen if there is no named beneficiary |
Just curious what that might be. Have you ever seen a policy that said anything other than without a living beneficary the proceeds would go somewhere other than the estate?
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Lori
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| Posted: Fri Jul 17, 2009 8:02 pm Post subject: |
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| I think that the majority of policies are completely silent on the issue as to what happens if there is no beneficiary. If a policy is silent on the issue, the laws of the state will determine what happens. My GUESS is that the laws in every state will have the money getting paid to the estate. |
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InsuranceExpert
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| Posted: Sat Jul 18, 2009 12:52 pm Post subject: |
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When you think about it, why would a person even purchase life insurance if they had no beneficary to name? What on earth would be the point?
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Lori
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| Posted: Sat Jul 18, 2009 7:02 pm Post subject: |
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| Often, insurance is purchased to protect one's future insurability. Even if that is the case, a beneficiary should be named so that if death occurs today, the money will go where the person wants it to go. |
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InsuranceExpert
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| Posted: Sun Jul 19, 2009 7:32 pm Post subject: |
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| I have known cases where there are no beneficiaries and distant relatives can claim and win the benefits |
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DV360
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| Posted: Fri Jul 24, 2009 2:08 am Post subject: |
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| Makes a good case to make sure you assign someone to be the executor of your estate, just in case your beneficiary passes before you and you fail to update due to incapacity, and make sure you have a will in place to make sure the money goes where you want it to. At least that's what I think. |
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Carol902
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| Posted: Fri Jul 24, 2009 3:47 am Post subject: |
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| Quote: | | I have known cases where there are no beneficiaries and distant relatives can claim and win the benefits |
DV360- you said that you've known cases in which this has occurred. Show me one. Find me the case study. If you can show me, I will absolutely shut up. I have never once seen in my entire career a situation where there are no named beneficiaries and the proceeds went to OTHER than the estate of the insured. In every state that I know (that's a lot and I'm not gonna check the ones I don't know about), statutes require this. It's not a choice. I cannot comment on other countries because I have no idea. So, find me a state or a case where this has occurred. You're never to old to learn something, and I ain't that old.
We need Spicuzza in on this...where the heck is he? 
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InsTeacher
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| Posted: Fri Jul 24, 2009 10:45 am Post subject: |
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| DV360, are they claiming the insurance benefits or are they making a claim for the money in the estate after the insurance was paid to the estate? |
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InsuranceExpert
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| Posted: Fri Jul 24, 2009 7:28 pm Post subject: |
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It goes to the estate. It is like passing without a will and being intestate. The courts and lawyers will decide, but I think any blood relative will have a claim and have to relinquish it for it to go to spouse and/or children.
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JTInsure
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