Most people invest in life insurance, and for good reason. However, many people do not consider how life insurance and estate planning intertwine. While life insurance may seem complicated, it truly does not have to be, especially with the assistance of an experienced Maryland estate planning attorney. Read on and reach out to our firm to learn more about life insurance & estate planning in Maryland. Here are some of the questions you may have:
What is life insurance and why do I need it?
Essentially, a life insurance policy is simply a contract between an individual and his or her insurance company. When you pass away, the insurance company will give your beneficiaries a lump-sum payment (or regular payments) in exchange for premium payments that you made while you were alive. In most cases, these payments are known as death benefits.
What are the different types of life insurance?
The three main types of life insurance policies in Maryland are as follows:
- Universal life insurance: This type of insurance gives the insured party lifetime coverage. These policies are also flexible, meaning that the policyholder can raise or lower his or her premium payment or coverage amounts throughout his or her life. You should note, however, that universal life insurance policies generally come with higher premium payments than term life insurance.
- Term life insurance: If you are someone who lost potential income during your working years, you may select term life insurance, which essentially replaces lost income, however, your loved ones will receive one lump-sum death benefit, as opposed to regular payments.
- Whole life insurance: Those who purchase whole life insurance essentially purchase permanent life insurance that provides lifetime coverage. The payments in whole life insurance are fixed and generally come with higher premiums. In many cases, the cash value of the payments will work as a savings component and will accumulate, tax-deferred, for your beneficiaries, when the time comes.
When will I receive a life insurance payment?
Generally speaking, life insurance claims are processed within 60 days of an individual passing on. However, in most cases, as long as you have all of the essential paperwork in order, your claim should be processed within 14 days. If you have any further questions about life insurance or the estate planning process, please do not hesitate to speak with our seasoned Maryland estate planning attorneys.
Contact our experienced Montgomery County, Maryland firm
The attorneys at JD Katz have years of experience compassionately guiding clients in Maryland through the estate planning and administration process. Our firm also has experience with matters of elder law, business law, tax law, and litigation. For a legal team that will put your needs first, contact JD Katz today.