What is the meaning of a spendthrift clause in a life insurance policy?
: a provision sometimes included in a life insurance policy prohibiting the beneficiary from assigning or anticipating payments coming due and exempting such payments from the claims of creditors of the beneficiary.
Is there a monetary clause in life insurance?
A clause in an insurance policy with cash value that entitles the insured to all or a portion of the benefits, or a partial refund on premiums paid, if the insured person misses premium payments and the policy lapses as a result. This clause is usually only in effect for a limited period of time.
What is a spend thrift clause?
A spendthrift clause is a provision in a trust – most trusts contain one – that prevents a trust beneficiary from using a future distribution to secure credit. The clause also prohibits payment to a creditor if it extends credit to a beneficiary based on future distributions.
What happens if life insurance goes unclaimed?
Unclaimed life insurance policy proceeds are turned over to the state in which the insured is last known to have resided (often with interest) after a certain number of years have passed, following state laws on unclaimed property.
What is the common disaster clause of a life insurance policy?
The common disaster clause states that the primary beneficiary must survive the insured by (usually 30-90 days) or the benefit is automatically paid to the secondary beneficiary.
Who does spendthrift clause protect?
A “spendthrift provision” is a clause in a Trust or a Will that protects a beneficiary against a creditor attaching prior debts against the beneficiary’s inheritance as well as preventing the beneficiary from acquiring debt based on the future inheritance.
Can trusts own property?
Unlike a person or a company, a trust is not a legal entity that can own property. This is because a ‘trust’ is just a relationship between the legal owner (the trustee) and the beneficial owners (the beneficiaries).
What are common disaster clauses?
A ‘common disaster’ clause deals with what will happen if spouses die at the same time. Rather than using a common disaster clause, the WillMaker will provides for such an event using two common tools –- alternate beneficiaries and a survivorship requirement of 45 days.
What is the Incontestability clause in life insurance?
An incontestability clause is a clause in most life insurance policies that prevent the provider from voiding coverage due to a misstatement by the insured after a specific amount of time has passed.
What is an in Terrorem clause in a will?
An in terrorem clause is a clause in a will which asserts that if a devisee challenges the will, the devisee will not receive her devise. In many states this type of clause is not enforceable if there is probable cause to challenge the will.