Life Insurance: Beneficiary Options, Rights, and Benefits

A life insurance beneficiary is the person that receives the payout from a life insurance policy and must be selected by the insured person at the time that the contract is signed.

• Lump sum: onetime, income tax free payment
• Life Income: guaranteed periodic payments over the beneficiary’s lifetime
• Life Income with a Period Certain: guaranteed periodic payments over the beneficiary’s lifetime with the option to transfer the payments to a secondary beneficiary if the primary beneficiary dies within a stated number of years
• Joint and Last Survivor Income: guaranteed periodic payments over the lifetimes of the primary beneficiary and the secondary beneficiary
• Interest Income: only the interest on the death benefit is paid to the primary beneficiary while the actual benefit is paid to a secondary beneficiary upon the primary beneficiary’s death
  

• A right to obtain copies of the death certificate
• A right to choose how the death benefit should be paid
• A right to sell the deceased’s assets in order to determine how to pay off loans, mortgages, etc.
• A right to remove his or her property from the deceased’s property before selling the deceased’s property
  

• The deceased’s entire estate, including assets both physical and financial, unless otherwise specified in the insurance policy contract