This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

No Lump Sum For You





When it comes to life insurance, you may think beneficiaries can only receive payments in a lump sum.

But there's another option some insurers are beginning to offer -- policyholders can opt to require beneficiaries to receive the money in installments over a set period of time.

That may be a wise move if you think a large windfall may bring additional stress to a spouse, child or other relative already mourning a death in the family, says Catherine Theroux, spokeswoman for the financial research firm LIMRA.

"After the death of a loved one, your survivors may not want to worry about what to do with the money, especially if it's a large amount," she says. "It may not be the best time to make such decisions and progressive payouts may allow beneficiaries to adjust over time to their new wealth."

Further, says Theroux, it might help to curb an urge for beneficiaries to take the money and run -- right to a place like Las Vegas to spend it. This could be at odds with the policyholder's desire to provide a stable form of income for a family member. (See: "5 keys to choosing permanent life insurance.")

If you're on the receiving end, a mandated installment payout may help you manage your finances better, says Theroux. "Remember that life insurance is often seen as a way to replace some of the lost income provided by someone," she says. "The amount you receive may seem like a lot of money at the time you get it … you may feel like you're very rich. But it's good to be a little patient and focus on the long-term and how the money can help you over time." (See: "How to evaluate term life insurance.")

Among the first to offer such a plan is Minnesota Life, through its partner AMZ Financial Insurance Services. The new life insurance product, Omega Builder IUL , includes the "income protections agreement" feature, which "allows policy owners to arrange for the death benefit to be paid as an irrevocable settlement option in a combination of installment payments and lump sum payouts," according to a company statement released in late February.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,583.55 -296.81 -1.76%
S&P 500 1,935.54 -34.53 -1.75%
NASDAQ 4,380.01 -82.8920 -1.86%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs