LEARN ABOUT BENEFICIARIES TO LIFE INSURANCE POLICIES
What Is A Beneficiary To Life Insurance? Q&A
Question: "What Are Beneficiaries To Life Insurance Policies?"
Answer: "A benefciary to a life policy is the designated individual to gain funds from cash or a death benefit. Many individuals today do not give much thought to the process. Most will name their husband or wife to be the primary beneficiary to a policy, while others many include a contingent (back up) beneficiary to their policy such as their children or next of kin. Understand that choosing your beneficiary and keeping up to date is very important. Items to consider when selecting a beneficiary: The huge advantage relative to proceeds from a life insurance policy is that they pass outside of probate. If you name your "estate" as the primary beneficiary that makes your cash subject to the probate process, which can ends up taking to much time, money, and effort to get done. If you have it set up as a primary beneficiary paying to an individual the Life insurance proceeds are paid quickly to named beneficiaries. Make sure you review changes to beneficiaries on a regulary basis. One situation we see on a regular basis is upon a divorce individuals do not update their policy and the proceeds are paid to an ex wife or husband. Let Paramount give you a review today.
Life Insurance Policy Reviews Are Important
Many Individuals do not go through the process to do a policy review on their beneficiaries. Make sure the proceeds of your policy will be paid correctly.
When buying a life insurance policy you have many decisions to make, including who is going to be the beneficiary. This may be the most important thing to think about – it will effect you now, and of course, your family in the future. There are sure to be many questions on your mind when trying to decide on a beneficiary. This is natural, and you are probably going to be faced with many doubts.
It usually makes the most sense for your life insurance beneficiary to be your spouse. For most people, this is the answer to the question. If you are married you will not have to worry much about choosing a beneficiary because your spouse is the right person.
Of course, there are circumstances in which a spouse is not the right choice. For instance, you may be going through a divorce. In this case, you probably want to choose somebody else as the beneficiary. The same holds true if you already have a policy – you will need to make a change unless you want your ex-spouse to remain the beneficiary of your death benefit.
Don’t rush into choosing a beneficiary. There are many options, and some of them you may have never even thought about. For instance, people with a lot of money often times leave their life insurance policy to a charity. Is this something that is of interest to you? If so, you want to make sure that your family will be taken care of first; this should go without saying.
If for any reason you need to change your beneficiary it is important to do so at once. The longer you wait the more of a risk you are taking with the future. For instance, if your spouse passes away, and they were your beneficiary, you have to make a change. Maybe you want to name a child as the beneficiary, now?
It is your decision as to who will be the beneficiary of your life insurance policy. Make sure you put a lot of thought into this, and that you make any necessary changes in the future.