Precedence is the term used to describe something that is given precedence or is dealt with before other things. 

In decision-making, it's possible for certain tasks or priorities to take precedence over others because of their urgency or significance. The order of importance or rank determines the sequence of events in ceremonial or formal occasions, as well. When it comes to the distribution of specific assets, beneficiary designations generally have priority over wills or trusts. For instance, in the event that you have a retirement account or life insurance policy with a beneficiary named. Regardless of your will or trust, these assets will always be directed to the designated beneficiary. It's important to ensure that your beneficiary designations match your overall estate plan. Unintended consequences or legal disputes may arise due to conflicts between these documents. Reviewing and updating your estate plan and beneficiary designations on a regular basis can help prevent such issues.

During your lifetime, funds can be distributed to the value of the premium paid.

It appears that you're referring to a concept that is typically linked to certain types of life insurance policies, like whole life insurance or universal life insurance. The policyholder may have the ability to access the cash value of the policy while they are still alive under these policies. The death benefit remains unaffected when loans or withdrawals are taken up to the amount of premiums paid. Using this feature can be beneficial for covering unexpected expenses or supplementing income during retirement. It's worth mentioning that accessing these funds could impact the policy's death benefit or result in fees.

Beneficiaries don't have to pay taxes on payouts after death.

According to U.S. federal law, beneficiaries usually don't have to pay taxes on life insurance payouts upon death. The death benefit is not taxable income and does not have to be reported on the beneficiary's income tax return, which is what this means. Exceptions exist, like when the policy was sold or transferred for a specific value.

Universal and whole are the two types of permanent life insurance.

That's correct! Permanent life insurance is divided into universal life insurance and whole life insurance. Here's a quick summary:

Whole life insurance that encompasses all aspects of life

• Provides fixed premiums and a guaranteed life insurance benefit.
• A guaranteed cash value is generated over time.
• Despite the benefits of stability and predictability, premiums can be higher.

Universal Life Insurance provides coverage for life events.

• Offers a variety of options for premiums and death benefits.
• Cash value growth is influenced by interest rates or market performance (depending on the universal policy type, such as indexed or variable).
• Policyholders have the option to adjust coverage as their needs change.
• Despite providing lifelong coverage and the ability to build cash value, both types cater to different financial goals and preferences.

After taxes, contributions to the insurance are made, resulting in tax-free account growth.

It appears that you're referring to tax-deferred accounts, in which pre-tax dollars are used for contributions. The funds can grow tax-free while they're in the account by this method. Typically, taxes are paid when funds are withdrawn, which happens to be during retirement. This concept doesn't fully apply to life insurance. After-tax dollars are commonly used to pay for life insurance policies. The cash value growth in certain permanent life insurance policies (like whole or universal life) is not taxed, and the death benefit is usually tax-free for beneficiaries.

When the owner passes away, the asset is distributed according to the beneficiary designation.

That's correct! Upon the owner's death, beneficiary designations are legally binding instructions that determine who will receive certain assets. The assets will bypass probate and go directly to the named beneficiaries when these designations take precedence over wills or trusts. Life insurance policies, retirement accounts, and transfer-on-death (POD) or transfer-on-death (TOD) accounts are just a few of the common examples.

It's essential to update beneficiary designations, particularly after significant life events such as marriage, divorce, or the birth of a child, to make certain they align with your overall estate plan.

Beneficiary designations are commonly employed to avoid probate.

Beneficiary designations are usually utilized to prevent probate, not for probate assets. If you designate a beneficiary for accounts such as life insurance policies, retirement accounts, or payable-on-death (POD) accounts, your assets will pass directly to that beneficiary upon your passing. By doing this, the probate process can be avoided, which can be both time-consuming and costly.