Life Insurance?

Question

If you are the beneficiary of a Life Insurance policy, do you receive both the cash value and the death benefit?

Answer 1

Usually not.  Some Universal Life policies do have this feature though.

Answer 2

No.  The cash value represents the owner's liquidity in the contract while the insured is alive.  The death benefit is the payout to the beneficiary once the insured dies.

Caution! complicated noodly bit:

The death benefit is always exactly the death benefit at any given time.  This fact does not change.  In the case of increasing options (like B, C, and yes even D options with UL or various dividend options with WL), the face value is modified in a specific way to determine the death benefit.  However, agents should not confuse face value with death benefit.  Once the insured dies, only the death benefit at the time of death is relevant.

Answer 3

No.  You receive the death benefit.

Answer 4

It depends on the policy. Universal life policies have an option A and B.  A pays the face value, B pays the face plus cash value.  Whole Life policies only pay the face, and term has no cash value.

Answer 5

No.  Cash value goes to the insurance company to keep.  You get the death benefit only.

Answer 6

Many Universal Life policies have two options regarding the death benefit and cash value.  

Option 1:  The beneficiary gets the face amount and the insurance company keeps the cash value.  

Option 2:  The beneficiary gets the face amount plus the cash value.  

Option 2 will cost more than Option 1 so it ends up being a wash.  

Most basic permanent or whole life insurance products only give you the Option 1 scenario.  Well...I guess you don't really have an option, but you get the idea.

Answer 7

The answer really depends on what the policy says. But in 90% of the policies, when you insured dies, the insurance company pays the death benefit to the beneficiary, but keeps the cash value for themselves.

In order to include the cash value with the death benefit, the policy owner has to pay more premiums since the first day the policy was issued.

Answer 8

No, you only get the death benefit.  By nature of the policies sometimes the death benefit is increased due to the growth of the cash value, but the stated death benefit would already include that amount.  SO, no you only get the death benefit.

Jeff