If you think about it, your life insurance settlement option used is vital
when it comes to what you really want your policies to do. Most life insurance
agents don't discuss this in detail. The online life insurance salesmen are even
worse. Special consideration has to be given as to whether or not this policy is
intended for family protection. Is this policy intended to provide an income, or
is the need a lump sum need. Is the need for a retirement income whether through
an annuity or a permanent life insurance policy. Is the policy intended to pay
estate taxes.
What of business life insurance, is this policy intended to fund a "buy sell"
agreement or is it for key person insurance.
Regardless of the purpose, the life insurance settlement option you decide on
is an important decision and is worth your thought and consideration.
Here are the options you have.
You can have the proceeds paid out in one Lump Sum. This is an
advantage if the need is a lump sum need, like last expenses etc. This can be
wrong option if the intent is to secure the family until the children finish
school. It is better to use an income option to fulfill this need.
The proceeds of the life insurance policy can be paid in the form of a
Life Income. Let us take a situation where your desire is is to have
sufficient income paid to your spouse for the rest of her life, the Life
Income Option is ideal. Incidentally, there are several Life Income Options.
When setting up your pension you can arrange with the insurance company to
pay out the income until the last person named dies. This is referred to as the
Joint And Last Survivor Settlement Option. Usually used for married
couples.
Another life insurance settlement option is the Interest Income
Option. You say to the insurance company, pay me the interest each month and
keep my principal intact. I like this option especially when the principal is
sufficient to provide a decent monthly income.
Another option is the Fixed Period Income Option. You say to the life
insurance company, pay me whatever income the lump sum will provide over the
next seven years, for example. The insurance company will do exactly that. Let
us say you have a youngster about to enter medical school, you want to use this
income to guarantee that the funds are available to take care of these costs,
this would be a good life insurance settlement option to use for this.
The Fixed Amount Option is similar to the fixed period option as far
as the end result is concerned. In this case, however, you decide on the amount
of income you desire each month.
My method is to take the utmost trouble to find the right thing to say, and
then to say it with the utmost levity. George Bernard Shaw, (1856 - 1950)
About the Author
Donald
Lusan http://www.lifeinsurancehub.net/
