Social Security & Life Insurance
In addition to retirement benefits, Social Security provides disability and survivors' benefits to workers and families. Survivors' benefits are monthly payments in an amount based on the work history of the deceased worker, and paid to a spouse, minor children or other qualifying relative. According to a December 2010 "USA Today" article, Americans have not been purchasing private life insurance because they have other financial priorities. Social Security survivors' benefits are an excellent life insurance for America's families.
Other People Are Reading
-
Worker Eligibility
-
A worker must have sufficient credits of work history for survivors to receive survivors' benefits. A worker needs no more than 10 years of work history to qualify for survivors' benefits, but may need less. The worker may have as few as six credits over the three years prior to death. Other special rules exist, depending on the age of the worker at death.
Survivors' Eligibility
-
A wife caring for the deceased's children who are under the age of 16 can qualify for a monthly annuity or payment at any age, and for as long as she cares for a child under 16. The deceased's children receive a monthly payment until age 18, or 19 if they are still in secondary school. The deceased's parents over age 62 who dependent on the deceased for more than half of their support may also receive survivors' benefits. An ex-spouse who is unmarried who cares for the deceased's child under 16 may also receive benefits. A spouse or ex-spouse without a minor child can collect survivors' benefits as early as age 60. A disabled spouse may receive survivors' benefits as early as age 50, and a disabled child may receive survivors' benefits after age 18.
-
Private Life Insurance
-
Receiving a life-insurance payout does not affect your Social Security survivors' benefits. Social Security does not base survivors' benefits on need, but on work history of the deceased and payment into the Social Security tax system. Social Security penalizes individuals under full-retirement age who have earned income in excess of $14,160 in 2011. Social Security adds the penalty back into the formula at full-retirement age, but you may lose benefits during early-retirement years. The Internal Revenue Service taxes Social Security benefits if you have income in excess of $25,000 as a single taxpayer or $32,000 as a married taxpayer filing jointly.
Maximum Benefits
-
Each worker has a maximum total monthly survivors' benefit allowable, as shown on the Social Security statement issued once a year. This maximum is between 150 and 180 percent of benefits the worker would be entitled to if alive. If a worker has several dependents who claim survivors' benefits, the total claims may exceed the maximum allowed. In that event, Social Security reduces all claims by a percentage. The claim of an ex-spouse does not count in the maximum unless caring for a minor child of the deceased worker.
-
