Estates larger than $650,000 (in 1999) may face some potential tax consequences. This applicable exclusion amount, as it’s called, is set to increase over the next several years.The first $650,000 can go to your beneficiaries tax-free, but your heirs (excluding your spouse) have to pay income taxes on anything over that amount. If you have a large estate, you may want to ensure that more of your estate goes into your beneficiary’s hands, rather than to the government.
Minor children as beneficiaries
You may not want to choose your children as your beneficiaries if they are still minors. Under the current law, children under the age of 18 can’t collect insurance benefits directly, even if they’re the rightful heirs. If you die and your children are the beneficiaries, the proceeds can only go to them in a trust fund, which an adult must manage. If you don’t select this adult (perhaps a lawyer or an accountant, or an organization such as a bank), the probate court selects someone or some organization to oversee the money. When your children reach the age of maturity, usually 18 years old, the funds automatically go to them.
Before that time, the trust fund administrator controls how the funds are invested and spent.
Before that time, the trust fund administrator controls how the funds are invested and spent.
Deciding your beneficiaries
When you purchase a life insurance policy, one of the first things you must do is decide who will be the recipient of the benefits — hence the term beneficiaries. Most people designate their spouse as the primary beneficiary, which means that the spouse gets the entire death benefit when the policyholder dies. If you’re single, your primary beneficiary is likely to be your children, if you have any.
However, your circumstances may give you reason to name more than one beneficiary, especially if your estate is sizable. Naming additional beneficiaries is extremely important in the event that the primary beneficiary dies at the same time you do or that person dies before you.
However, your circumstances may give you reason to name more than one beneficiary, especially if your estate is sizable. Naming additional beneficiaries is extremely important in the event that the primary beneficiary dies at the same time you do or that person dies before you.
Coinsurance Hole In Coverage
I've just started the review of a new client's coverage. There, on the first page was a glaring error - a coinsurance penalty. It may be the most common problem I see - aside from named insured issues...
Coinsurance is a penalty assessed at the time of a loss. It is the way insurers assure that insureds buy adequate limits of coverage.
The penalty takes away coverage by limiting a loss payout. For almost 30 years insurers have been removing the penalty by the use of the "agreed amount endorsement." It is exceedingly rare for insurers to refuse to eliminate the penalty. The only time I see it is when the insurer thinks that the amount of insurance is inadequate. The insured then negotiates with the insurer and the problem is solved.
A coinsurance clause on building or on personal property tells me an agent is not aggressive enough - either with the insurance company or with their client.
Coinsurance can also be eliminated on loss of business income protection. Same deal. Get the insurance company to agree that the coverage amount is correct and they can remove the penalty.
Some property insurance policies hide coinsurance. Its quite common on inland marine (equipment) coverage and computer hardware coverage sections. Removing the penalty in these two areas is more difficult, though not impossible. Sometimes it just takes the agent asking a few questions.
Coinsurance is a penalty assessed at the time of a loss. It is the way insurers assure that insureds buy adequate limits of coverage.
The penalty takes away coverage by limiting a loss payout. For almost 30 years insurers have been removing the penalty by the use of the "agreed amount endorsement." It is exceedingly rare for insurers to refuse to eliminate the penalty. The only time I see it is when the insurer thinks that the amount of insurance is inadequate. The insured then negotiates with the insurer and the problem is solved.
A coinsurance clause on building or on personal property tells me an agent is not aggressive enough - either with the insurance company or with their client.
Coinsurance can also be eliminated on loss of business income protection. Same deal. Get the insurance company to agree that the coverage amount is correct and they can remove the penalty.
Some property insurance policies hide coinsurance. Its quite common on inland marine (equipment) coverage and computer hardware coverage sections. Removing the penalty in these two areas is more difficult, though not impossible. Sometimes it just takes the agent asking a few questions.
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