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Spousal life and death insurance: How does it work?

Spousal life and death insurance: How does it work?

You have lost your spouse who has taken out life insurance, but you do not know what procedure to follow to take possession of the capital of the insurance? Indeed, the life insurance contract mentions the beneficiaries of the subscriber's capital. Thus, to benefit from the latter, you must be registered in the clauses as a beneficiary.

In this way, you will come into possession of this heritage and enjoy the benefits it offers. However, the capital of the life insurance contract is not only reserved for the spouse. Children and other relatives of the subscriber can also benefit from it. Find out here how life insurance chews up after the death of a spouse.

What does the clause say after the death of a subscriber to life insurance?

After the death of a subscriber to life insurance, the insurance contract is automatically terminated. Thus, the entire capital of the insurance is paid to the beneficiaries mentioned in the contract. That said, as soon as a person who has taken out life insurance dies, you must always rely on their last wishes to see who inherits the insurance contract.

Usually the main heir is the spouse then follows the children of the deceased and then the other relatives. If the spouse is not interested in this insurance, the other benefits come into play. Indeed, many people are not interested in the insurance of a deceased spouse. This is explained by the fact that the procedures for recover life insurance after the death of the spouse often take a long time.

These steps can sometimes lead to justice, which many spouses do not prefer. However, the insured himself mentions who or who should benefit from the capital of his insurance contract. Thus, it is only the will of the latter that is taken into account.

If it is the spouse, then he will inherit this insurance without constraint. Otherwise, it is the beneficiary mentioned by the main insured who will inherit the life insurance contract. It can then be children, a family member or someone with whom he has no familiarity.

What happens to the insurance contract if the subscriber's spouse dies?

It is not uncommon to see the spouses of life insurance policyholders die before the main insured themselves. If the latter was the beneficiary or one of the beneficiaries of the life insurance contract, the contract will be automatically reviewed.

Certain changes will thus be made to the contract so that the share of the deceased beneficiary is transferred to another person. That said, the main insured may designate new people to benefit from the capital of his life insurance contract after his death.

However, if the main insured does not make any changes to the basic contract, the heirs to the capital of the life insurance contract will be the second-rank beneficiaries. These will be the children of the main insured who will benefit from this capital after the death of their parent. This amount will be shared equally between the children if the subscriber does not provide any special details.

However, if the children do not want this inheritance, it will be sent to the third-tier beneficiaries. These are close members of the subscriber's family, in particular brothers and sisters, cousins, nephews and nieces, etc. It can also be a friend or relative who is not from the same family as the subscriber.

In order to benefit from the life insurance capital of a deceased subscriber, the beneficiaries must provide proof of their inheritance. The inheritance papers must therefore be presented to the insurance company. These must bear the signature and stamp of a notary to prove their authenticity.

What happens to the life insurance contract if no beneficiary is designated?

It is common to see many people who do not mention beneficiaries in their life insurance contract. This state of affairs is observed following inattention by the subscriber. This can also happen when the insured has not yet found a worthy beneficiary to inherit the capital of their life insurance.

When the main insured does not mention any beneficiary in his life insurance contract, the total capital goes to the estate of the deceased insured. In this way, the capital of the life insurance is transmitted to the legal heirs of the subscriber.

In this case, these are generally the subscriber's children or grandchildren. It can also be his spouse or a close family member. In rare cases, the heirs may be persons with whom the subscriber has no family relationship.

The capital transmitted to the legal heirs is thus subject to inheritance tax and therefore loses its tax advantage. That said, the capital will be subject to the tax charges required in the event of succession.

Is life insurance part of a deceased's estate?

A subscriber's life insurance does not form part of the deceased insured's estate. Thus, the capital transferred to its beneficiaries is not subject to the droits of succession. However, the heirs of such capital must be mentioned in the life insurance contract.

Given that the capital of life insurance is outside the estate, the latter benefits from life insurance taxation, which is a great advantage for the beneficiaries of this capital. In the field of life insurance, the taxation applicable to inherited capital varies according to several criteria. These include in particular:

  • The date of subscription to the life insurance;
  • The date the bonuses are paid;
  • The age of the insured at the time of the payments.

Depending on these factors, certain reductions will be made on the tax charge. However, if the beneficiary is a spouse (husband or wife of the subscriber), the capital of the life insurance is tax exempt.

In short, as soon as the life insurance subscriber dies, the insurance contract is automatically terminated. Thus, the entire capital of the insurance is paid to the beneficiaries mentioned in the contract. However, in the absence of beneficiaries, the capital is transferred to the subscriber's legal heirs. In this case, the insurance will lose its tax benefits. However, if the beneficiary is a spouse, the capital will be exempt from tax duties.

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