Collecting Life Insurance as the guardian of an Estate

Life Insurance is taken out by people who are worried that should they die the remaining family will have the burden of paying the funeral costs and any debt they might leave behind.  By taking out a Life Insurance policy this gives them the peace of mind in the knowledge that their death will not create financial difficulties for the loved ones left behind.  The best time to take out a Life Insurance policy is when you are young.  Although nobody likes to think about death, taking out a Life Insurance policy when young means that the premium paid each month will be much lower than waiting until middle age.  When applying for Life Insurance the premium will depend upon the person's age, health, occupation, family medical history and whether they take part in any dangerous or risky activities, such as motor racing or mountaineering.  The premium will be based upon the details the applicant has submitted.  Life Insurance policies cover the whole of the insured's lifetime and can only be cashed in on their death.  Once the policy holder has died whoever is the beneficiary will need the death certificate as proof before the Insurance Company pays out.

As the guardian of an Estate the proceeds may be included for death duty which is known as inheritance tax.  The insurance company will need a death certificate and an insurance claim form submitted before any benefits can be paid.  The guardian of an Estate will need to appoint a solicitor to help them sort out everything that the deceased person owned.  This will all be added up including any properties, jewellery, money in bank accounts, any stocks and shares and other items of value.  Inheritance Tax will depend upon the amount of the Estate in total.

For the majority of people however, the proceeds from a Life Insurance policy will be paid to the next of kin within a few weeks of making a claim.  This enables people to pay the costs of a funeral (which can be quite expensive) as well as paying off any remaining debts of the deceased.  The lump sum of money paid out will also include all the bonuses that have accumulated over the years.