Life Insurance Question

Question

If a life insurance policy holder dies before the insured, can the insured cash in the policy? The policy holder and the insured are related.

Answer 1

Insurance Agent is correct.  You can only cash in the policy if you became the new owner when the old owner died.

Check with the insurance company to see who the new owner is.  You need to give them the death certificate of the old owner.  They will let you know if there is a contingent (new owner).  If there is none, then the policy will belong to the current owners estate and will have to be settled in probate unless there is a trust.  It is the owners asset.

Answer 2

The policy is only 'cashed in' when the insured dies.  If the owner of the policy dies and they are not the insured, the cash value of the policy (if it's a whole life policy) would go to the owners estate.  If it's a term policy, the policy would just cancel as no more payments would be made.  Although you may be able to talk to the insurance company to have it transferred into your name.