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what does it mean to be a beneficiary of life insurance

A beneficiary is a person in whose favor an insurance contract has been concluded, that is, to whom, upon the occurrence of an insured event, an insurance payment must be made.

The beneficiary can be either an individual or a legal entity. The consent of the beneficiary to conclude an insurance contract in his favor is not required.

In general, the beneficiary may be the policyholder, the insured person or another entity (paragraph 1 of Article 929, paragraph 1 of Article 930, paragraph 3 of Article 931, paragraph 3 of Article 932, paragraph 2 of Article 934, paragraph 2 of Article 939, paragraph two of Article 956 of the Civil Code of the Russian Federation).

Thus, as a general rule, a property insurance contract can be concluded only in favor of persons with an insurable interest, that is, incurring losses from the occurrence of an insured event (clause 1 of article 930, article 933 of the Civil Code of the Russian Federation). Insurance of the risk of civil liability is carried out in favor of third parties to whom the policyholder (other insured person) may incur the corresponding liability (clause 3 of article 931, clause 3 of article 932 of the Civil Code of the Russian Federation).

A personal insurance contract may be concluded in favor of the policyholder, the insured person or any other entity. However, in order to conclude a personal insurance contract in favor of a person who is not insured (including in favor of an insured person who is not an insured person), the written consent of the insured person is required (second paragraph of clause 2 of article 934 of the Civil Code of the Russian Federation).

As a general rule, a third party in whose favor an insurance contract has been concluded has an independent right to demand an insurance payment from the insurer in the event of an insured event (clause 2 of article 939, second paragraph of article 956 of the Civil Code of the Russian Federation).

It is controversial whether the beneficiary has such a right under the contract of insurance of the risk of liability for causing harm. Such an agreement is considered concluded in favor of persons who may be harmed (clause 3 of article 931 of the Civil Code of the Russian Federation). However, in accordance with paragraph 4 of Article 931 of the Civil Code of the Russian Federation, the beneficiary has the right to present directly to the insurer a claim for compensation for harm only in the case of compulsory insurance, as well as in other cases provided for by law or an insurance contract.

In judicial practice, there are two points of view on this issue:

1) the beneficiary in any case has the right to claim insurance payment by virtue of paragraph 1 of Article 430 of the Civil Code of the Russian Federation (see, for example, Resolution of the FAS of the North-Western District of 04.08.2008 N A21-1877/2007);

2) the beneficiary has the right to demand insurance payment from the insurer only in the cases specified in paragraph 4 of Article 931 of the Civil Code of the Russian Federation (see, for example, resolutions of the FAS of the North Caucasus District of 02.04.2012 N F08-1140 / 12, FAS of the Moscow District of 13.03.2012 N F05-1106 / 12).

A beneficiary is not an entity to which, at the direction of a person entitled to receive an insurance payment (policyholder or beneficiary), it must be made, but does not have an independent right of claim against the insurer. In this case, there is the usual redirection of execution (see Article 312 of the Civil Code of the Russian Federation, as well as, for example, the decisions of the FAS of the Volga District of 30.11.2010 in the case of N A65-4562 / 2010, the FAS of the Ural District of 21.06.2011 N F09-2958 / 11).

An insurance contract concluded in favor of a person other than the policyholder, who, by virtue of law or contract, has an independent right to demand insurance payment from the insurer, is a contract in favor of a third party and the general provisions on this contractual structure enshrined in Art. 430 of the Civil Code of the Russian Federation apply to it, to the extent that this does not contradict the special rules on the insurance contract (see, For example, the decisions of the FAS of the Moscow District of 05.08.2011 N F05-7166 / 11, the FAS of the North-Western District of 05.04.2010 N F07-2395 / 2010, the FAS of the Ural District of 21.01.2010 N F09-11204 / 09-C5, cassation rulings of the Investigative Committee on Civil Cases of the Sverdlovsk Regional Court of 20.09.2011 N 33-13489 / 2011, the St. Petersburg City Court of 15.09.2011 N 33-14075 / 2011, the Moscow City Court of 18.04.2011 N 33-11108).

The conclusion of an insurance contract in favor of a third party does not release the policyholder from fulfilling the obligations stipulated by the contract. However, the contract may entrust the beneficiary with the fulfillment of obligations. In addition, in cases where the insurance contract does not contain such a condition, the obligations of the policyholder may be voluntarily fulfilled by the beneficiary in order to exercise his right to receive insurance payment (Article 939, paragraph two of Article 956 of the Civil Code of the Russian Federation).

Who is the beneficiary and how to appoint one?

In this article, we will analyze the difference between the policyholder, the insured person and the beneficiary under a life insurance contract. In what situations do all three roles combine one person? Who can be the policyholder, beneficiary and insured? First things first.

Is there a difference between the policyholder, the insured person and the beneficiary?
The policyholder is the one who enters into a contract with the insurance company. According to the law, this role can be played by a capable individual or legal entity. It is the policyholder who pays insurance premiums and informs the insurance company about the risks or the occurrence of an insured event. All obligations of the insured are spelled out in the contract and policy conditions (insurance rules).

In any life insurance contract, the insured person is indicated. It is his life, health and ability to work that are insured. Disability, disability or death of the insured person will be considered an insured event (if they are provided for by the insurance contract, and the event as a result of which this happened is not included in the list of exceptions under the policy conditions).

The insured person can be the policyholder himself or any other person.

Who can be the beneficiary?

If you draw up an insurance contract yourself and at the same time you are an insured person, you can appoint a beneficiary – the recipient of money in the event of an insured event. Often, in life insurance, the policyholder is both the insured and the beneficiary.

If the beneficiary is not specified in the voluntary life insurance contract, it is automatically the insured person, and in the event of his death, the heirs of the insured.

But the policyholder can appoint another beneficiary of his choice or several beneficiaries with an indication of the share of each of them in the insurance payment. For example, endowment life insurance programs at Raiffeisen Life allow you to save money for loved ones: for example, for a child’s education or for a parent’s pension. In this case, the beneficiary may not be a relative of the insured.

It is important to remember that if the policyholder and the insured are different persons, then the consent of the insured person is necessary both for the appointment of the beneficiary and for his replacement.

If the beneficiary is not appointed, then after the death of the insured, the sum insured will be paid to his heirs. But only after they go to the notary and receive a certificate of inheritance – otherwise they will not be able to receive payment. The beneficiary does not need this, it is enough to notify the insurance company about the insured event and provide the relevant documents about the event.

Is it possible to change the beneficiary?

The policyholder may change the beneficiaries of the insurance contract and their shares during the term of the contract. Raiffeisen Life customers can submit a request for such changes online through the form on the company’s website. The application will be accepted for processing on any business day.

Separately, it is worth noting insurance contracts with annuity payments – regular receipt from the insurance company of a small part of the already accumulated insurance amount. For example, you have been saving for a future pension for 10 years, have retired and receive payments monthly. In this case, the beneficiary can only be changed while you are saving money. When payments have already begun, this cannot be done. If the beneficiary dies during the payment period, the rest of the insurance payment will be received by his heirs.

Everything you need to know about investment life insurance (ILI)

What’s it?
The essence of the ILI is as follows: the client transfers money to the insurance company, that is, buys a life insurance policy. The insurance company places them as follows:

– for a smaller part, the client is invited to try to earn investment income, which potentially exceeds the rates of a bank deposit (deposit).

Since the legal shell in this case is an insurance policy (the client is insured for the entire period of the contract), the ILI provides all the same advantages as endowment programs.

The main objectives of the ILI are:

Let’s take a look at the possible parameters of the ILI:

For whom?
ILI programs will be relevant:

Pros:

  1. ILI as a product with an investment component is for clients a highly profitable alternative to a bank deposit with a guaranteed return of the entire amount of invested funds.
  2. A client who has issued an ILI product can receive a tax deduction from the state for the amount of contributions to the program. This is a social tax deduction for voluntary life insurance contracts concluded for a period of at least 5 years, it is no more than 120,000 rubles per year (no more than 15600 rubles on hand).
  3. Beneficiaries in the event of an insured event (death of the insured person) receive payment within 14 calendar days after sending the documents to the insurance company (and not after 6 months, as inheritance takes place under the Civil Code).
  4. Insurance payments are not subject to taxation (Article 213 of the Tax Code).
  5. Funds contributed to the savings program are not divided between spouses in case of divorce. The savings program remains with the spouse who purchased it. The conclusion of a marriage contract does not change the rights of the owner. In addition, the owner of the program can change the beneficiary at any time if he indicated a former spouse (Article 34 of the Family Code).
  6. Fiscal authorities (court, bailiffs, tax) cannot seize the insured amount (this is the only legal way in the Russian Federation to “hide” their savings from fiscal and other state bodies).
  7. Insurance programs are guaranteed to be returned without an upper limit, that is, all the client’s funds are refundable. This is how they differ from a bank deposit, where the amount to be returned in the event of an insured event is no more than 1.4 million rubles.

Cons:

  1. Long term (diversion of funds for a long period).
  2. In case of early withdrawal, the client receives the redemption amount, as a percentage of the accumulated at the time of termination, that is, not all invested funds.
  3. Returns on this product are not guaranteed, any historical returns do not guarantee future returns, all forecasts can be considered as nothing more than assumptions.

As experienced employees of asset management companies who have been engaged in asset management for many years say: “There are no perfect products, but there are effective portfolios.”

How to apply for an ILI?
The ILI program itself can be purchased either from an insurance company or from a credit institution that is an agent for the insurance company.

In any case, when choosing an insurance company, you need to pay attention to the following points:

  1. Founders and experience in the market.
  2. Who is the reinsurance company.
  3. Place in the market (share) and reliability ratings.
  4. Number of clients and contracts.
  5. Assets and who is the management company.
  6. Judicial practice.
  7. Recognitions and awards.
  8. Official website (its availability).
  9. Licenses for the right to carry out voluntary life insurance and voluntary personal insurance.
  10. Who is the auditor of the insurance company.
  11. Regulation of activities by the Central Bank, whether the company is included in the list of systemically important companies, whether there is information on the company’s performance on the regulator’s website.
  12. Information on historical profitability under endowment and investment life insurance contracts.

When registering a product, the client fills out an application. He is issued a policy and a standard contract. The basic terms of insurance for a particular client are prescribed in the policy (or in the specification for the policy).

Payment can be made in cash (pay by receipt) or non-cash (by debiting money from a bank card using a terminal, transferring by payment order from a current account or by making a payment directly on the website of the insurance company).

The protection comes into effect from 00.00 on the day following the day of payment and issuance of the policy. In different insurance companies, this moment operates differently (if the policy is issued after some time, after payment and before the policy is issued, only part of the protective parameters are valid).

When buying a policy with installment payment, installments must be made on time. If the client, for one reason or another, is not able to continue to pay premiums under the insurance policy, but would like to continue to cooperate with the insurance company, he is offered several options. First, apply for the transfer of the policy to the status of paid. In this case, the insurance cover will continue to be valid only for a limited number of risks, for example, “death for any reason”, and investment income will be accrued only on reserves for the amount accumulated by that time. Secondly, the client can take advantage of the “financial holidays”, which will allow him not to make contributions for a period of one to three years while maintaining the full amount of insurance coverage (that is, to receive exemption from paying the insurance premium). Thirdly, the client can reduce the amount of the premium, for example, by reducing the package of additional risks or shortening the insurance period.

The beneficiary can be changed at any time (as a general rule), but in some companies there are exceptions.

The main terms in the field of insurance are as follows:

Background

The Great Ones About Insurance
In conclusion, I would like to cite a few quotes from famous people about life insurance:

I wish you good luck and financial well-being!

Beneficiary in insurance

The insurance payment from the insurance company is not always received by the person who pays the insurance premiums. In some insurance programs, the beneficiary is a close relative, another person, or even a third-party company in whose favor the insurance was issued.

Who is the beneficiary in insurance, who is entrusted with this function and whether it is possible to change the recipient of insurance compensation, Brobank figured out.

Who is recognized as a beneficiary in insurance
At the conclusion of the insurance contract, 4 parties are involved: the insurance company, the policyholder, the insured and the beneficiary. Sometimes there are only two real participants – the insurance company and the policyholder, who is also the insured person and the beneficiary.

Each of the participants performs the functions assigned to him:

When it comes to life insurance, a third party is always appointed as the recipient of the insurance premium, who will be compensated in the event of the death of the insured. When concluding an insurance contract for property that is pledged, the beneficiary is the one who acts as a pledgee. So, when applying for a mortgage or car loan, the beneficiary will be the bank in which the loan was issued.

What are the insurance contracts?
In the Russian Federation, there are three types of insurance contracts:

Each insurance contract contains:

If there are several objects of insurance and risks in the contract, insurance will cost more, and regular premiums will be higher. Insurance companies do not insure against everything at once. Each item, object and risk must be listed separately.

Complex insurance contracts can include several risks at the same time, but they should be studied very carefully. In the event of an insured event, you will need to prove it. The insurer checks each situation very carefully and, if some risk is not indicated in the policy, the payment of the insurance premium will be refused. At the same time, it does not matter who the recipient of insurance is – the beneficiary or the insured person himself.

Validity of the insurance policy
Any insurance contract is limited in time. If there is a desire to extend the insurance, an additional agreement to the contract is issued or a new insurance contract is drawn up.

The contract comes into force after signing by the insurance company and the insurer that makes the insurance payments. But in some cases, the policy does not begin to operate from the date of signing, but upon the occurrence of certain conditions or dates. For example, from the beginning of the school year when insuring a student.

Difference Between Beneficiary and Insured

The insured person and the beneficiary often differ in the insurance relationship. The life of the beneficiary is not covered by the insurance policy. For some types of insurance, the insurer independently indicates the beneficiary at the conclusion of the agreement. But in the event of the death of the beneficiary, the insurance company does not pay material compensation to anyone.

Usually, a close relative of the insured is appointed as the beneficiary. But it can be a friend of the insured citizen or another person. If a citizen insures property, real estate, he can also appoint another person as the recipient of insurance compensation.

Another difference between the policyholder and the beneficiary is that the beneficiary becomes a priority person in receiving insurance compensation. But he may waive the right to receive payments in favor of the policyholder. In turn, the policyholder can take advantage of the beneficiary’s refusal, then he will become the recipient of money from the insurance company.

Rights and obligations of the beneficiary
The beneficiary cannot be appointed without his consent, since in addition to the rights, the beneficiary also has certain obligations under Article 430 of the Civil Code of the Russian Federation.

The rights of the beneficiary at the conclusion of the insurance contract:

The beneficiary of the insurance payment must:

If the insured person enters into an insurance agreement and for any reason refuses to fulfill his obligations, they are transferred to the beneficiary. Otherwise, the insurance contract will be considered terminated. But then the beneficiary will have to compensate for all costs associated with the termination of the contract.

Can the policyholder be a beneficiary?


Usually, when concluding an insurance contract, there are several entities. The policyholder is guaranteed payments by those companies with which he enters into an agreement. But he can also be the recipient of the insurance payment, if the insured citizen and the beneficiary have common interests in the insured property.

Another person is more often appointed as the beneficiary, but in life insurance against injuries or temporary incapacity, the beneficiary and the policyholder may be the same person. For example, the tenant may be the beneficiary of a life insurance contract. But in a home protection agreement, the beneficiary will be the owner of the property, who is interested in compensation for damage to his property.

Who determines the beneficiary?


According to the law, the beneficiary acts as a third party at the conclusion of the insurance contract, but in fact it may not be indicated in the agreement. You can find information about who is appointed as a beneficiary in the insurance policy or in the contract. But this information will not always be indicated there.

Some documents by law require the inclusion of the beneficiary in the contract:

There may also be documents according to which the beneficiary is indicated by name or by the name of the enterprise, if it is a legal entity. For example, with bank insurance of the borrower, the creditor bank will receive payments, while the amount of compensation will not exceed the amount of the loan balance. There may be several beneficiaries. Compensation is shared between the borrower and the lender.

In case of voluntary insurance, the insured person has the right to independently appoint a beneficiary.

How to change the beneficiary

The beneficiary can not only be independently indicated, but also changed in accordance with Article 956 of the Civil Code of the Russian Federation. At the same time, it is necessary to observe a number of rules:

It is impossible to replace the beneficiary under one condition – in the case of compensation that has been made or is already in question. If the current beneficiary submits a claim to the insurance company or the insurer’s obligations to him are fully repaid, the procedure for replacing the beneficiary becomes impossible.

What happens in the event of an insured event
In the event of an insured situation, the beneficiary is obliged to:

After that, the beneficiary must wait for the compensation to be transferred to a bank account or card.

If the insured person dies, to whom a personal insurance policy is issued, the recipients of the insurance payment may be:

If the beneficiary is a person who does not belong to the heirs under the law, entry into inheritance rights and obtaining a certificate is not necessary. The beneficiary can immediately receive compensation from the insurer.

Who inherits the insurance payment of the deceased
If the beneficiary is not specified in life insurance, the insured citizen automatically becomes one. If there is an insured situation that is not related to death, the insured person will receive compensation. In the event of the death of the insured and the absence of instructions about the beneficiary, only legal heirs under Article 1152 of the Civil Code of the Russian Federation are entitled to compensation. In this case, the monetary compensation for insurance is included in the inheritance mass.

The heirs will be able to receive money only after registration of the right to inheritance. To do this, they go to a notary and apply for rights to payments and other property of the deceased. It is possible to apply for a certificate of inheritance only within 6 months from the date of death of the insured relative, this is spelled out in Article 1154 of the Civil Code of the Russian Federation. If you do not meet this deadline, the right to inheritance will have to be restored through the court Article 1155 of the Civil Code of the Russian Federation. This can be done only if there were valid reasons why it was not possible to issue a certificate earlier. For example, being in the hospital.

In most cases, they turn to the will of the deceased citizen. If the beneficiary is indicated in the will, compensation will be given to him. If the recipient is not included in the will or there is no will, the inheritance will be distributed according to the law. First, the money is received by the heirs of the first stage, then the second, etc. In total, Russian legislation provides for 8 queues. Dependents who have been in the care of the insured person for more than a year will also receive their share.

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Comments: 18
If you have any questions about this article, you can let us know. Our team consists of only experienced experts and specialists with specialized education. In this topic, they will try to help you:

Hello, I have a child under my care, because both of his parents died. He is the beneficiary after the death of the pope. Can he get insurance before he turns 18?

Dear Olga, if the beneficiary is a minor child, then the insurance company can make a payment to the child himself when he reaches the age of majority, or the payment can be made to his parents, close relatives or guardians.

And if, after the death of the insured, two children come into the inheritance, one minor is 16 years old, only one beneficiary, the eldest son of 23 years old, can receive payments.

Dear Tatiana, no, if the child has reached the age of 14 (minor heir), he has the right to submit an application for acceptance of the inheritance to the notary. A minor enters into an inheritance by submitting a notarized application for acceptance of the inheritance.

Good afternoon.
“If we are talking about life insurance, a third party is always appointed as the recipient of the insurance PREMIUM, who will be reimbursed compensation in the event of the death of the insured. When concluding an insurance contract for property that is pledged, the beneficiary is the one who acts as the pledgee.” – Did you want to say the recipient of the insurance indemnity?

Good afternoon
Please help me figure it out.
On 08.04.2014, the contract was concluded.
The beneficiary is determined.
Under this program: the beneficiary receives a payment if fear. The incident happened in the first two years, starting from the third insurance is paid to those who were engaged in the burial.
On 13.04.2021, the insurance company entered into a DS, the insurance option was changed: under these conditions, the insurance payment is made to the designated beneficiary.
Upon the occurrence of fear of an accident in 2019, the insurance company refused to pay the beneficiary for the event, arguing that the policyholder had changed the insurance option, but did not appoint a beneficiary (the insurance company wrote a letter that the beneficiary was appointed in the first two years of the contract). How reliable is this?

Can the beneficiary, who is also the policyholder, receive a 13% tax deduction? If the granddaughter is insured (voluntary life insurance).

Dear Alla, yes, you can count on a deduction.

Dear Natalia, in accordance with Article 958 of the Civil Code of the Russian Federation (part two) dated 26.01.1996 No. 14-FZ (as amended and supplemented, entered into force on 29.06.2021), the policyholder (beneficiary) has the right to withdraw from the insurance contract at any time, if by the time of refusal the possibility of an insured event has not disappeared.

Good evening. The mother-in-law received the money after the death of her daughter, she was inscribed as the recipient. Can my son claim this money after the death of his mother?

Dear Sergey, the beneficiary can receive an insurance payment. After his death, all funds are inherited in a standard manner.

Good afternoon. Does the beneficiary under the voluntary life insurance policy after the death of the insured have the right to receive monetary compensation in full or minus interest?

Dear Tamara, the nuances regarding the amount and procedure for payment of compensation are determined directly by the life insurance contract.

A beneficiary is a person in whose favor an insurance contract has been concluded, that is, to whom, upon the occurrence of an insured event, an insurance payment must be made. When concluding an insurance contract, it is always specified who is the beneficiary – the bank, the borrower or both the bank and the borrower. If the insurance company and the bank refuse to pay you, study the contract. It is possible that in your case the beneficiary is the bank.

Dear Vladislav, as a general rule, for the risks of “Death”, “Disability”, “Injury”, the beneficiary is the insured person / relatives.

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