Instalment Payout From Proceed

Someone receiving a large sum of life insurance proceeds all at once could just as easily blow it all in one fell swoop. Some consumers have expressed worry about entrusting a large payout to a young beneficiary or even a spouse who lacks experience managing finances. These customers were concerned that the future needs of their beneficiaries wouldn't be met. And, insurance companies have been listening.

There's now a life insurance option allowing people who buy policies to select instalment payments for their death benefit - known as "instalment-payout life insurance. And it may offer a number of advantages.

The Money Doesn't Have to Come All at Once
Policyholders can choose a lump sum, equal payments or a combination of both when deciding how to divide up their death benefits. If instalments are chosen, proceed may be paid out over a period of 10 to 30 years, and the payments can be made either monthly or once a year.

Instalment payout can cut premiums
Instalment payouts give the insured more control over what happens to the benefit paid upon death and also can offer some cost savings upfront. Depending on the payout plan you choose, your premiums may be lower because the insurance company will hold on to at least part of your money over a longer period of time. This discount can be as much as 20 percent.

Benefit Earns Inflation-Fighting Interest
Another potential plus is that a life insurance benefit paid out in instalments may withstand inflation.
Insurance company will pay interest to the beneficiary on the remaining proceed.  $900,000 death

But the Beneficiary May Need a Lump Sum
Instalment payout can put the beneficiary at a disadvantage. The insured can't predict what the future holds for his or her spouse or other survivor, who might need the life insurance proceeds in a lump sum.