Millions of Americans receive benefits from the Social Security Administration each month. While many people think the program only benefits retirees, this program also provides benefits to people with disabilities, surviving spouses, and their dependents.
You must have limited financial resources to qualify for Social Security benefits. If you have a life insurance policy, the Social Security Administration will not interfere with your policy.
How Do Life Insurance And Social Security Benefits Work?
Life insurance is a contract between a policyholder and an insurance company in which the insurance company agrees to pay the beneficiary a sum of money upon the insured person’s death. The policyholder pays premiums to the insurer, which uses part of the money to invest in stocks, bonds, and other investments. The insurance company then uses the returns from these investments to pay out death benefits when needed.
The federal government provides Social Security benefits to eligible individuals who have worked and paid into Social Security through payroll taxes. These benefits are paid out monthly and can be used for retirement, disability, or survivors’ benefits. Your credits over the last ten years of work must be 40 to qualify for Social Security retirement benefits. Survivors’ benefits are available for those who have lost a spouse or parent who was receiving Social Security payments at the time of their death.
Does Life Insurance Influence Social Security Benefits?
No, life insurance does not affect Social Security benefits. Social Security is a government-run program that provides financial support to retirees and those who are disabled. A life insurance policy gives money to the beneficiary upon the insured person’s death.