What is a life insurance death benefit?
The death benefit is the payment insurance companies make to the beneficiaries of a life insurance policy after the insured dies. When it comes to life insurance policies, the beneficiary will receive the death benefit if the policy was in force when the insured passed away. Who Gets the Life Insurance Death Benefit?
How does life insurance help you financially?
This financially protects your family because life insurance can be used to replace your income if you pass away. The life insurance company steps in at the time of death and provides a lump sum payment, tax free to the beneficiaries listed on your life insurance policy. This payment is called the death benefit and is an amount in Canadian dollars.
What happens to a life insurance policy in probate?
If the life insurance policy was in a Trust, it can make the process quicker. A Trust sets out who the payout should go to, known as beneficiaries, and it isn’t counted as part of the estate. So the trustee can transfer the payout to the beneficiaries before grant of probate is granted.