Can Any Liens Be Put on the Life Insurance Policy of the Deceased for Medical or Other Bills?

One of the most typical problems in life insurance policies are problems with deceased medical bills as well as other debts that need to be paid. It would be very difficult for hospitals to force relatives to pay the medical bills of the deceased unless there is a written document which places them as guarantor of the said bills. Nevertheless, if the insurance policy indicates that the life insurance policy will cover even the medical bills of the deceased, then the insurance company should be the one to issue the check to the hospital and the hospital need not bother the relatives of the deceased.

It is on very rare occasions that life insurance policies will be placed on lien especially if there is a listed beneficiary on file. The rule of thumb is this, the beneficiary on record gets all the claim benefits in case the policyholder dies. This remains true unless there are problems with the premium payment of the policy. The beneficiary in any way cannot be forced to pay the medical bills of the deceased but in good faith he or she may wish to do so since technically speaking the money which he or she receives is still the money of the deceased.

Types of Life Insurance
The amount of claim benefits a beneficiary gets after the death of the policy holder varies on the type of policy he or she purchased. It is best that you know which type of policy the deceased holds so you will know the appropriate amount of claim benefits you are supposed to get.

Term Insurance
This type of policy is a life insurance coverage which is intended to protect the policy holder within a limited number of years. The policy in no way will accumulate cash.

Permanent Life Insurance
This type of life insurance policy remains in force until the maturity of the policy or the last pay-out has been paid. The policy remains in effect and cannot be canceled unless due to fraud and misinformation in the policy. There are several options for withdrawing the money after the maturity date. These includes borrowing the cash value, withdrawing certain amounts on particular interval, or surrendering the policy.

Types of Permanent Life Insurance

Whole Life Coverage
This provides a premium level of coverage which provides guaranteed death benefits to the policy holder’s beneficiaries, guaranteed cash value, known annual and fixed premiums, mortality and even expense charges that will not in any way reduce the cash value of your policy.

Universal Life Coverage
This is one the latest insurance products being offered by insurance companies which provide greater flexibility in premium payment for the policy holders. It also has a greater potental growth value in comparison with other types of policies. There are several types of this policy namely, interest sensitive insurance, variable universal life insurance, guaranteed death benefit insurance and equity indexed universal life insurance.