by: Retirement Dictionary Staff
If you are a breadwinner for your family, you have likely considered whether you need life insurance to replace your income, in the event you die while they are still dependent on you financially. And, if you are like many other individuals, you might not have taken Social Security into consideration, when assessing how much life insurance you might need.
The fact is, most individuals think of Social Security as an only a retirement benefit. However, it provides other benefits, including serving as an insurance policy in some cases. The following is a high level overview of this benefit.
Generally, your survivors are eligible for benefits if you worked for at least 10-years (earned 40 credits). However, this requirement could be lower. For example, of you die at a very young age, your survivors could still be eligible if you were employed for at least 1½ years during the three years before your death.
Eligible survivors include the following:
- Your surviving spouse. He or she can receive full retirement benefits at full retirement age, or reduced benefits at age 60 or older ( but younger than full retirement age)
- Your disabled spouse, starting as early as age 50,
- Your surviving spouse can receive benefits at any age, if he or she takes care of your child who is under age 16 or disabled and receiving Social Security benefits,
- Your former spouse, providing certain conditions are met,
- Your unmarried children, if they are under age 18, or up to age 19 if they attend elementary or secondary school full time.
- Any disabled children of yours, if they were disabled before age 22 and remain disabled; and
- Your dependent parents age 62 or older.
If certain requirements are satisfied, your stepchildren, grandchildren and adopted children if any, may also be eligible for survivor benefits.
Bear in mind that you are eligible for survivor benefits, if you are a dependent of a deceased beneficiary, and you meet any of the requirements above. If the decedent was receiving Social Security benefits, and received an amount for the month of death and after, those amounts must be returned to the Social Security Administration.
The amount of benefit your survivors would receive depends on factors such as their relationship to you, their age, and whether you were receiving Social Security benefits.
If you were receiving reduced benefits, your survivor benefits would be based on the reduced amount.
Your survivors cannot receive survivor benefits in excess of what you would receive, had you lived.
Your surviving spouse or child may also receive a one-time lump-sum payment of $225 if certain requirements are met.
We Can Help You or Your Survivors With The Application Process
The amounts of benefit your survivors receive can go a long way towards helping them cover their living expenses. However, proper procedures must be followed to ensure that they receive the maximum amounts for which they are eligible.
The application process for your survivors depends on their relationships to you, and whether they are receiving benefits under their own record.
This is a very high level overview of the survivor rules, and is intended only to bring awareness to the fact that these benefits are available for eligible individuals. There are many other factors and rules to consider.
We can help survivors understand to their options, and provide helpful guidance with the application process.
Please contact your financial advisor to discuss these benefits.