Life Insurance Basics If you pass away, the life insurance company can pay out a death benefit to the person or persons you named as beneficiaries to the policy.

Can you change your life insurance beneficiary at any time?

A revocable beneficiary can be changed at any time. Once named, an irrevocable beneficiary cannot be changed without his or her consent. You can name as many beneficiaries as you want, subject to procedures set in the policy. The beneficiary to whom the proceeds go first is called the primary beneficiary.

What happens to a life insurance policy after death?

Any interest earned by the proceeds would be taxable, however, if the policy earns income after the date of death. This might happen if you don’t take the benefits in one lump sum but rather stretch them out in installments over a period of years. The balance retained by the insurer would keep growing.

What happens if you inherit a life insurance policy?

Inheriting life insurance can bring tax and other consequences, however, and it occasionally happens that the company refuses to pay out at all. You can collect policy death benefits by sending the original death certificate and the original life insurance policy to the insurer if you’re named as the beneficiary.

Can a life insurance company refuse to pay out benefits?

It’s possible for an insurer to refuse to pay out benefits under some circumstances, but generally only if the policy provides for it. By law, insurance companies can take up to one to two years in most states to investigate and potentially deny claims for violations of the policy’s terms.

When do you have to change your life insurance policy?

Depending on your insurer, this may be within the first five to ten years of taking out the policy, or before your 60th, 65th or 70th birthday. If the deadline has passed, you won’t be able to convert your coverage.