QUESTION
Does an insurance accumulate interest?
Asked on Mar 06th, 2013 on Estate Planning - Michigan
More details to this question:
My father passed away years 13 years ago. Last week, we received a letter stating that my father had insurance with my mother as the beneficiary. Does the life policy insurance accumulate interest?
12 ANSWERS
Criminal Law Attorney serving Sacramento, CA
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Alison Elle Aleman
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It depends completely upon the terms of the life policy whether the payout would accrue interest before it is paid to the beneficiary. Ask the insurance company, or better yet, read the policy.
Answered on Mar 11th, 2013 at 9:22 PM
Estate Planning Attorney serving Marquette, MI
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The Wideman Law Center, P.C.
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There are many kinds of insurance. Some accumulate interest which is used to purchase more insurance. Some accumulate interest which increases the death benefit of the insurance. Term life insurance does not grow in value over time.
Answered on Mar 07th, 2013 at 12:28 PM
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Yes it should.
Answered on Mar 07th, 2013 at 12:28 PM
Estate Planning Attorney serving Provo, UT
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Randy M. Lish, Attorney at Law
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It depends on what the insurance contract says.
Answered on Mar 07th, 2013 at 12:28 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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Check the policy and call the insurer. That should give you a good idea.
Answered on Mar 07th, 2013 at 12:27 PM
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It depends upon what the policy states. Chances are good that it does, but again you need to review the policy for terms.
Answered on Mar 07th, 2013 at 12:27 PM
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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First of all, you dont mention what type of policy this is. I would check with the insurance company as to the payment of interest on the policy. Some policy accumulate dividends and paid up additions to the policy but whether or not interest is paid on the proceeds until they are paid out is a question that may be answered in the policy itself . Contact the insurance company.
Answered on Mar 07th, 2013 at 12:27 PM
Business Law Attorney serving Livonia, MI
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Gerald A. Bagazinski
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Yes. Look at the terms of the policy.
Answered on Mar 07th, 2013 at 12:26 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Usually yes and I would be interested in the details of this situation.
Answered on Mar 07th, 2013 at 12:26 PM
Probate & Trust Attorney serving Seminole, FL
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Law Offices of Phillip Day, P.L.
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Not really a legal question. Better to ask the insurance company directly, however, if I were a betting man, most insurance companies will hold the payout in either a non-interest bearing account or a low interest bearing money market account until the beneficiaries are identified which sometimes could take years. It would make a lot of sense for them use a money market account but I wouldn't expect significant or material returns as compared to any other money market account. On the other hand, there are plenty of non-interest bearing trust accounts out there that lawyers and accountants use so it will all depend on state law as well as insurance company policies and practices.
Answered on Mar 07th, 2013 at 12:26 PM
Elder Law Attorney serving Auburn Hills, MI
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Byers & Goulding, P.L.C.
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Some insurance polices include dividends.
Answered on Mar 07th, 2013 at 12:25 PM
Not necessarily. Please review this with an attorney who specializes in estates and life insurance. You can also request a Form 712 from the insurance company.
Answered on Mar 07th, 2013 at 12:25 PM