On Tuesday, April 21, 2015 at 12:26:57 PM UTC-4, dadiOH wrote:
krw wrote:
On Mon, 20 Apr 2015 12:48:37 -0700 (PDT), DerbyDad03
wrote:

Sometimes life insurance policies can "pay off" twice. Once when the
owner sells it, then again when the insured passes away.

No, once you sell an insurance policy it's no longer in force.

Incorrect.

Worse, the life payout is reduced by the value of the policy.

?? When the insured dies the owner of the policy receives the full amount
of the policy's death benefit.

Let's be clear here.

When the insured dies the *beneficiary* (or beneficiaries) of the policy receives the full amount of the policy's death benefit.

I can be the owner, you can be the insured and the crazy cat lady down the street can be the beneficiary.

or

I could be the owner and the insured and you can be the beneficiary (ain't gonna happen!)

or

I could be the owner and the insured and my trust could be the beneficiary. BTW...the trust is written such that you get half if and only if you help the crazy cat lady take care of her cats. That's my way of making you suffer even after I'm gone. ;-)


If you are thinking of a policy that earns and therefore has an ever
increasing cash value, that cash value may get very close to the death
benefit value of the policy but that has nothing to do with the death
benefit. If the owner of the policy has borrowed from the cash value, THEN
the death benefit is reduced by the amount borrowed plus interest.