A Dubious Deal for a Death Benefit

Some insurance companies move death benefit proceeds into retained-asset accounts, which have several drawbacks for beneficiaries.

EDITOR'S NOTE: This article was originally published in the May 2012 issue of Kiplinger's Retirement Report. To subscribe, click here.

If you're the beneficiary of a life insurance policy, you might be expecting to receive a simple check in the mail. But the insurance company may have another idea for the money. State regulators are taking a close look at "retained-asset accounts," where death-benefit proceeds are retained by the insurer but accrue interest for beneficiaries until they withdraw the money.

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Eleanor Laise
Senior Editor, Kiplinger's Retirement Report
Laise covers retirement issues ranging from income investing and pension plans to long-term care and estate planning. She joined Kiplinger in 2011 from the Wall Street Journal, where as a staff reporter she covered mutual funds, retirement plans and other personal finance topics. Laise was previously a senior writer at SmartMoney magazine. She started her journalism career at Bloomberg Personal Finance magazine and holds a BA in English from Columbia University.