What is Life Insurance?
Few things are more certain in life than the ending, and that ending is something that everyone should be prepared for. One way Vermont residents may want to prepare for their passing is by getting life insurance.
In its most simple form, life insurance normally pays out death benefits upon the policyholder’s covered passing. Some policies also have investment components that can be used to save for retirement or other goals.
What Are Death Benefits?
Death benefits generally are the payments made when the policyholder passes away in a covered claim. They’re often mentioned when referring to a policy. For example, a “million dollar life policy” would likely offer $1 million in death benefits.
Usually, there are few restrictions on how death benefits are used by the recipients whom they’re paid to. People commonly use them to help with living expenses, pay off debt, save up for a major purpose or cover end-of-life expenses, but they also can be put towards other purposes.
What Are Named Beneficiaries?
Named beneficiaries are normally the people or organizations who receive a life policy’s death benefits if they’re paid. The term reflects that the people are typically listed, or named, in the policy’s paperwork and benefit from the financial payments if they’re made.
There are often also few restrictions on whom a policyholder can list as named beneficiaries. Many people choose their spouse, children and grandchildren, but trusts, businesses, nonprofits and other organizations can also be listed. Policyholders can frequently also list non-related individuals.
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