Naming a Beneficiary
While most insurance policies that you invest in are meant to protect you, one does not – your life insurance. The benefits of your life insurance are meant to provide financial cushion for your loved ones after you are gone. When you invest in a life insurance policy, you will have to name a beneficiary, which is who will receive the death benefit of your policy after you pass.
You have many choices when choosing a beneficiary for your life insurance, including:
- A single person
- Multiple people
- A charity
- Your estate
- A trustee of a trust
If you do not choose a beneficiary when you set up your life insurance, the death benefit of your policy will be paid to your estate.
When choosing a beneficiary, you should choose both a primary and contingent beneficiary. The primary beneficiary of your policy will receive the death benefits of your policy when you pass away if they can be found. However, if they cannot be found, such as if they pass away and you do not change your policy, the death benefits will go to your contingent beneficiary.
When you are naming the beneficiaries of your policy, you should name them as clearly as possible, including identifying them with their Social Security number, since it will make it much easier for your life insurance company to locate them. You should also specify how you want the benefits to be handled if the primary and any contingent beneficiaries cannot be found. If you have not specified how you want the benefits to be handled, they can go into probate, which will make it much more difficult for your intended beneficiaries to collect.
For all of your life insurance needs to ensure that all of your loved ones are taken care of after you are gone, contact the Insurance Agency of Dean Davis in Austin, Texas.More