Michael Milazzo photo

Michael A. Milazzo, CLU, ChFC

Registered Principal

 

The Meridian Financial Company

3350 Club Villas Dr SE, Unit #1303

Southport, NC 28461

 

Phone:  631-979-4223

Fax:      910-854-0002

 

Email: meridian@ae.cadaretgrant.com

Website: www.merfinco.com

January/February 2018

Let's talk insurance Q&A

Lets talk insurance QA

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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Securities and Advisory Services offered through Cadaret, Grant & Co, Inc, a Registered Investment Advisor and Member FINRA/SIPC. The Meridian Financial Company and Cadaret, Grant & Co., Inc. are separate entities. I am registered to sell Securities in the following States: NY, NJ, PA, NC, FL, ID.
The Meridian Financial Company and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

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