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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
January/February 2018
Let's talk insurance Q&A
Q:
I have a life insurance policy that no longer meets my needs. I plan on buying a different policy. Should I cancel the existing policy before I buy the new one?A:
Since you probably don’t want to risk having a gap in coverage, it might be smart to keep your original policy in place until the new one becomes operational. It is possible that the insurer could determine that you have a health issue that you may be unaware of and reject your application for a new policy. Once you have a new policy in place, then you can take steps to cancel your existing policy.
Q:
I was the beneficiary of a life insurance policy and recently received the policy proceeds in a lump sum. I’d like to invest the money but first want to find out if the policy payout will be taxable to me?
A:
Generally, life insurance death benefits that are paid out to a beneficiary in a lump sum are not included in the beneficiary’s taxable income for federal income-tax purposes. So, in most cases, beneficiaries are free to invest or spend the money without having to be concerned about an income-tax bill. The tax situation can become more complex if ownership of a life insurance policy was transferred before death in exchange for money or other consideration. If there was an ownership change with the insurance policy, you should consult your tax advisor to find out how your taxes might be affected. Also note that life insurance proceeds could be subject to estate taxes.
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
GE-6572038.1 (4/24)(Exp. 4/26)
CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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