Is There An Insurance Policy That Will Pay Out Monthly Aswell As My Life Insurance?
Posted July 10, 2009 – 10:38 am in: structured settlements FAQI am looking for a policy that will pay out monthly to my wife,say until my children are 18 in the event of my death,completely seperate from my life insurance so she would get that aswell. Is there such a policy?
Tags: Aswell, Insurance, Life, Monthly, Policy, That, There, Will
2 Comments
If you are in the UK, then yes.
I assume that your existing life insurance policy, that pays a lump sum to your wife, is either a Whole of Life, Level Term Assurance or Decreasing Term Assurance policy?
In the UK there is no option for these types of policy to pay an income instead of a lump sum when you claim (unless you take the lump sum and invest it and draw an income).
There is a policy called a Family Income Benefit policy which does pay an income on death. It is actually a form of Decreasing Term Assurance. You take the policy out for, say, 18 years in line with your children becoming financially independent. The policy pays a monthly income (or annual) to the beneficiaries for the remainder of that term, in the event of your death.
I would strongly suggest that you consider writing this policy in trust so that the proceeds do not form part of your estate and therefore won’t attract an Inheritance Tax liability.
For info. Legal & General and Scottish Provident offer good rates. Make sure the cover is index-linked.
Regards.
If you have a life insurance policy in effect and she is listed as the beneficiary, she would have payout options upon your death. She can choose the payout option of receiving the full payout or she can open an “Annuity” which would pay her monthly or however she chooses.