Having Trouble Choosing a Beneficiary? Here Are Some Tips
Don’t neglect the importance of the required fields on your life insurance form. Designating a beneficiary is something that needs to be carefully thought through.
Choose Your Life Insurance Beneficiary with These 5 Tips
Filling out a form is nobody’s favorite activity, but that does not mean the information you’re giving lacks importance. When it comes to assigning the person who will receive the proceeds of your life insurance policy, don’t take anything for granted. Take time to think about it, and if you’re struggling with that decision, here are some tips that can help:
1. Be Mindful of the Purpose of the Policy
One thing that you always need to remember is the reason why you decided to get life insurance in the first place. What was your main goal? For example, if you’re thinking about keeping your business afloat after you’re gone, you could consider designating a business partner as your beneficiary, but if you want to protect the financial future of your family, you might want to designate your spouse. Every case is different. Just make sure you evaluate your options, keeping the purpose in mind.
2. Always Designate an Adult
It is not a wise to designate a child as a beneficiary. Some states have regulations in place around life insurance proceeds and how much a minor can receive. It is common for courts to assign a guardian to manage the money until the minor turns of age.
3. Your Will and Insurance Policy Should Match
Both your will and your insurance policy should be aligned. Check them frequently to make sure everything is in place. That way, you make sure they never override each other.
4. Keep All Info Up to Date
One of the most common mistakes related to life insurance policies is that the beneficiaries are not kept up to date. Some events in your life may affect who you designate, so make sure you consistently review the documentation to ensure the latest information is on there.
5. Don’t Forget Your Backup
Remember that having a contingent beneficiary is just as important as having a primary one. Don’t leave that box empty on the life insurance form. Feel free to use these tips to designate a contingent or secondary beneficiary also.
You don’t have to make this decision alone. If you need any help with this or any other insurance-related question, at AAI Central Agency, we’re always happy to help. Talk to one of our agents today, or stop by our office in Thornton, CO.