James
Davis AgencyJames
Davis AgencyLife Insurance
Frequently Asked Questions.
What is the definition of Life Insurance?
Life insurance is a
unilateral
contract between the Life Insurance Company and the insured person. A
unilateral contract is a one sided contract. One of its many benefits is
that it protects the insured from health or lifestyle rate increases.
Increases, if any, are spelled out in the contract and cannot be changed by the
company. The insurance policy cannot be canceled by the insurance company
for any reason except for nonpayment of premium.
How much Life insurance should I purchase?
The National Association of Life Insurance Underwriters suggests between five and eight times a person's annual income not inclusive of accidental Life insurance policies.
Are the proceeds of live insurance taxable?
The proceeds of Live insurance are paid directly to the beneficiary and are tax-free.
Are Life insurance proceeds subject to probate?
No. However, the amount of Life insurance owned does increase the estate of the insured person for estate tax purposes.