Life Insurance and Taxes Texas TX
Reader’s Question:
My uncle from Texas designated me and my sister as his beneficiaries in his life insurance policy. He died a single man. I want to know how much taxes should my sister and I expect?
Spencer
Houston, TX
Spencer, this will depend on how you got your designation as beneficiary. Were you and your sister designated as primary beneficiary in his life insurance policy, or were you designated to inherit his properties and incomes, including insurance policies, through a will?
The manner of how you were designated will make a very big difference because Texas laws subjects the estate of the deceased with what they call the estate and inheritance tax. If your uncle left a will stating clearly that he wishes you to have the life insurance money, then I suppose no other next of kin can contest to you receiving the money coming from life insurance claims as long as you and your sister are those written as beneficiaries. If it is clear that you really are the beneficiaries, then you can go ahead and make the claim.
However, if you were designated in general to be the custodian of his estate, then the state will record everything your uncle owns, and those will be subject to tax. The same also goes for when your uncle left no will and you and your sister are the only next of kin. This will also leave everything to his estate and are also subject to have tax deductions.
So, Larry, usually insurance policies protect the listed beneficiaries. It is only when contradictions between the will and life insurance policy appear that court mediation will be needed.
Tags: life insurance, life insurance beneficiary
Automobile Insurance Policy Coverage Texas TX
Reader’s Question:
What are the requirements for a full coverage automobile insurance policy in Houston, Texas?
April
Houston, TX
According to Texas law, every driver (this includes those in Houston, Texas) must have an auto insurance (if vehicle is owned), or a comprehensive and collision coverage (if the vehicle is not yet fully paid). Auto insurances are used to pay for damages caused by accidents such as damage to a person, to a vehicle, or to properties.
In Texas, a driver has to have a guarantee that he/she can pay for the damages in accidents where he/she was found at fault. Under the Texas Transportation Code, a driver may choose any one of the following financial responsibilities:
1. Auto insurance policy
2. Security bond in compliance with Section 601.121
3. Security bond in compliance with Section 601.122
4. Security bond in compliance with Section 601.123
5. Personal insurance in compliance with Section 601.124
In most cases, drivers choose to obtain an auto insurance policy to cover their state-mandated financial responsibilities. In April 1, 2008, the state of Texas ordered a 25/50/25 minimum coverage (for physical injury, vehicular damage, and property damage, respectively) for every auto insurance. Prior to this law, the minimum coverage required was 20/40/15. Since this new law is only pertaining to the minimum coverage, it does not guarantee that it could cover all the damages, especially if the driver is found to be at fault. Therefore, the driver may have to consider getting an insurance policy that has a higher premium to ensure that damages beyond the minimum would also be covered.
Tags: auto insurance, car insurance
Cancer Life Insurance Houston Texas TX
Reader’s Question:
Our family has history of cancer. I dread the thought of witnessing the painful death of my aunt due to cancer. She was so unprepared and under insured that my parents had to take care of her medical bills. I am still strong and able and I want to make sure I will be prepared in case something dreadful happens to me like a terminal illness or cancer. Do I have options for terminal illness life insurance in Houston, Texas?
Yung
Houston, TX
Well, not all life insurance companies offer accelerated death benefits, which is a rider intended for terminally ill patients, in long term care, or with catastrophic diseases. This is a type of benefit that is paid by some life insurance companies to their policy holders who have life expectancy of less than 1 year.
Terms and conditions applied to this benefit are actually dependent on the life insurance company, as this is a privilege which originally was intended for HIV-AIDS patients in the 80’s. As years went by, the privilege was extended to other terminal illness and permanent home confinement.
The privilege is given to policy holders who need money for medical procedures and other terminal illness expenses. What the policy holder gets from accelerated death benefits income will not be taxed and not even income tax in some states. Most life insurance companies will charge higher insurance premium for this benefit, while others will charge only if accelerated benefits is availed by the policy holder.
Different life insurance companies will have different policies on accelerated death benefits and it is best for you to call your trusted local provider in Houston, Texas. You can also compare premium rates for life insurance with such rider by using useful websites like this one, which can route you to free quotes online using the zip code form for life insurance rates comparison.
Tags: accelerated death benefits, cancer life insurance, long term care insurance, long term care insurance leads
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