As the life insurance policyholder, you can designate that your beneficiary is to be paid the death benefit a little at a time, over a period of years. You can decide whether you want to designate a specific time period for these payments or that a specific amount be paid in each payment until the total death benefit runs out. Any monies that haven’t yet been paid generate interest. In most instances, this income is not taxable to the beneficiary, although you and your beneficiary should certainly check with a tax advisor before making that assumption.
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