Welcome to Part 4 of our comprehensive “Everything About Survivor Benefits” series. In this segment, we delve into the complexities of insurable interest survivor benefit elections, eligibility criteria, and the essential considerations retirees must ponder when making these critical decisions.
Understanding Insurable Interest Survivor Benefit Elections
For retirees in good health who retire for reasons other than disability, the option to elect a survivor annuity for someone with an insurable interest exists. This election allows retirees to provide an insurable interest benefit alongside the maximum survivor benefit for a current or former spouse, albeit at a reduced annuity. Spousal consent is necessary if the retiree elects an insurable interest benefit for their current spouse, as they must waive their right to normal survivor benefits.
Eligibility Criteria for Insurable Interest Survivor Benefits
An insurable interest annuity can only be elected for individuals who can reasonably expect to derive financial benefit from the retiree’s continued life. This includes spouses, ex-spouses, blood or adopted relatives closer than first cousins, individuals engaged to be married to the retiree, or individuals in a relationship that constitutes a common-law marriage in a jurisdiction recognizing such unions. For individuals outside these categories, affidavits establishing the relationship and financial dependency are required.
Conclusion: Ensuring Financial Security for Loved Ones
Understanding insurable interest survivor benefits is paramount for retirees seeking to provide for their loved ones’ financial security. By electing these benefits, retirees can help protect those who rely on them financially in the event of their passing.
Stay tuned with Pathfinder Retirement for Part 5, where we’ll continue to explore survivor benefits, offering further insights to help retirees make informed decisions for their future and the future of their loved ones.