Payout Determined by Insurer?

[ForeverYoung82]

Yes i have a question regarding a life insurance policy. I wanted to know how does an insurance company come up with a figure on what to pay the beneficiary?

This is all new to me, so if you need more information i can provide it.

 

[LGilmore]

Are you asking as an insurance agent or as someone who has a policy?

 

[scagnt83]

Yes i have a question regarding a life insurance policy. I wanted to know how does an insurance company come up with a figure on what to pay the beneficiary?

This is all new to me, so if you need more information i can provide it.

Well, life insurance when taken out is always for a specific amount, called the "face amount" or "death benefit" of the policy. This is whats paid to the beneficiary.

A policy can have just one or multiple beneficiaries. If its just one they receive 100% of the death benefit. If there are multiple beneficiaries then there is always stated percentages for each one.

Does this answer your question? Are you new to the business, or just knew to insurance concepts? Why do you ask, what context are you asking in?

 

[ForeverYoung82]

Thank you for the help guys.

Let's see, where to start. I'm actually a beneficiary on a policy.

I'm filling out paperwork, and i see that the letter says 'final determination payout, to be made my company'

now that makes sense to me, i just wanted to know how they calculate the amount to be paid.

Here's some more info... my mother had basic life insurance valued at 50,000. on top of that she supplemental life insurance at 3 times her basic salary. so its up to the insurer to decide how much the final number is we get right?

 

[scagnt83]

Thank you for the help guys.

Let's see, where to start. I'm actually a beneficiary on a policy.

I'm filling out paperwork, and i see that the letter says 'final determination payout, to be made my company'

now that makes sense to me, i just wanted to know how they calculate the amount to be paid.

Here's some more info... my mother had basic life insurance valued at 50,000. on top of that she supplemental life insurance at 3 times her basic salary. so its up to the insurer to decide how much the final number is we get right?

Correct. Salary times 3, + $50K= death benefit.
Since salaries can vary, thats probably why there wasnt a firm amount. They will confirm what her salary was with the employer, then inform you of the total. Im not sure if they will use the before tax or after tax salary amount, probably just depends on the policy.

 

[ForeverYoung82]

^ Thank you for all your help. One more question what would be the deciding factor if an insurance company deciding not to pay. Like the cause of death or something like that?

 

[somarco]

There are generally no exclusions on group policies, including suicide. As long as the master contract was in force, the individual was properly enrolled with the carrier and premiums had been paid to date, they should pay the designated amount.

 

[LGilmore]

Do you know if the work policy as just a group life or AD&D policy. A straight group life will pay no matter cause of death (except if there's a suicide exemption) and an AD&D will only pay for accidental death ( no illness) and may have a time limit for a payout. (example 90 days, live 91 days no benefit.)

 

[BNTRS]

Why are you filling this out, and not the HR department of her employer?

 

[ForeverYoung82]

It is just a group life, supplemental life insurance package. and BNTRS, her job didn't have an HR department. What i'm doing is a survivors benefit package, where i fill out paperwork. And they'll notify the insurance company for me.