Are life insurance proceeds reported in survivor reports?

My understanding is that ESP calculates and adds life insurance when needed. I have seen discussions herein where it is stated that the premiums are added as expenses. Are the benefits also calculated in case of survivor reports? When I run the report with survivor reports set to start while life insurance is being recommended, I don't see the insurance benefit reported as income on any of the survivor reports. Wouldn't the life insurance be added to the regular assets? Or, do I need to add the benefit in the contingency, special receipts section?

Comments

dan royer's picture

The life insurance premium calculate for that year just appears in your Regular Assets pool of money. So the survivor would see an extra $100K or whatever the recommended amount was for that year.

Tom Formhals's picture

Ok. To clarify, the extra amount is the recommended amount for that year, not the amount of life insurance the couple may have (which is an input). As has been pointed out in other comments, life insurance is typically a fixed benefit amount for a specified terms. So, in cases where survivorship targets a date with differing amounts of recommended amount versus actually held life insurance, that difference (positive or negative) should be inputted in contingency planning.

dan royer's picture

That's right. The program is showing the precise amount for each year needed to protect the survivor's per-adult living standard in that year. Of course we don't buy one-year term policies, so you have to take that as a guide as to how much to purchase in 5 or ten-year chunks. The amount they currently own is not added or substracted from what is needed--although if there's a cash value that is considered available to regular assets.

Yes, you could try to adjust for premiums and if you are a modeling the death in a particular year, you could also give them a special receipt in that contingent plan so as to reflect the insurance receipt that the program would have no way of knowing about--even if you indicated they had extra insurance.

We use cookies to deliver the best user experience and improve our site.