Life insurance beneficiaries may not always take their proceeds as a single payment. When this happens, the insurance company is able to earn money on the remaining amount. Moreover, many insurance companies try to âmanageâ the money for beneficiaries by keeping the money in interest-bearing accounts and issuing checkbooks for beneficiaries.
LANGUAGE
They use language, such as, âLet me give you the security of not having to make an investment choice,â essentially leveraging off the emotional distress experienced by the beneficiaries. Given the trust commonly invested in insurance companies, it is relatively easy for beneficiaries to fall under this trap; however, this factor is outside the reach of insurance regulations.
SECURITY
The problem is amplified when you remember that benefit money left with insurance companies is not covered under the Federal Deposit Insurance Corporation (FDIC), so if the insurance company goes bust so does your beneficiary account balance. Many consum
