Specifying who will receive the proceeds of your term life insurance coverage is an important decision that shouldnât be skipped over. Here are 5 tips to follow when choosing a life insurance beneficiary.
Buying life insurance is arguably a complex and important financial decision, but it’s also a very useful product that can help you protect your family’s financial future if something were to happen to you.
Some of the benefits of purchasing term life insurance coverage include:
- it protects your family from any financial and emotional problems in the future.
- it provides you with peace of mind, knowing your loved ones would be taken care of should something happen to you.
- it will help your family pay off any outstanding debts in the event of your death.
- it provides a tax-free lump sum death benefit to your family for them to use how they see fit.
Protect Your Loved Ones From Financial Hardships With 20/20 Term Life Insurance
At 20/20, we understand the importance of protecting your family. Our team of licensed insurance agents is happy to work with you to find the right term life insurance coverage to give you total peace of mind, knowing that in some of life’s most unexpected and difficult moments, your family will always be financially secure.
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5 Tips For Choosing Your Life Insurance Beneficiary
When choosing your term life insurance coverage, it may seem that choosing your life insurance beneficiary is a ‘obvious choice’ or one of those ‘required fields’ that is tempting to glaze over. However, specifying who will receive the proceeds of your policy is an extremely important decision and should never be taken lightly.
Here are 5 helpful tips to help you choose the right beneficiary:
1. Keep Your Goals and the Purpose of Your Policy in Mind
The reasons why you are getting life insurance coverage should drive your choice of beneficiary. Do you want to provide for your family financially after you’re gone? If so, your spouse may be the best choice. However, if you want your company to continue, then you may want to consider your business partner as a beneficiary.
Talking to one of our licensed agents about your goals and purpose can help ensure you make the right choice when it comes to selecting a life insurance beneficiary.
2. Know Your Options
When choosing a beneficiary, there are many options you have. Generally, you can designate one or more of the following examples:
- your spouse
- your children
- a non-profit organization or charity
- your estate
- the trustee of a trust you’ve established
If you decide to have more than one beneficiary, then you must also specify how the benefit will be split among them.
3. Have a Back-Up
On your policy, the primary beneficiary is the person(s) or entity you choose to receive the proceeds upon your death. However, there may be cases where your primary beneficiary:
- refuses the coverage
- is deceased at the time of your death
- cannot be located.
In such a case, a secondary (or contingent) beneficiary becomes the recipient, so make sure to follow the same careful advice when selecting your second beneficiary as you would for choosing the primary one.
4. Keep It Up To Date
One thing that most people forget is that it’s very important to keep your life insurance beneficiaries up to date. For example, if, at the time of purchasing a life insurance, you are single, you may name your mother as the primary beneficiary.
But what happens later, when you are married? If you forget to update the beneficiary on your policy, then the proceeds will still go to your mother and not your spouse and/or children.
5. Don’t Count On Your Will to Override Your Beneficiary Choices
Make sure all your wishes are honoured by having your will match your life insurance policy. If you update your will, take the time to update your term life insurance coverage (and vice versa).
REMEMBER: In the event that your will and life insurance beneficiaries don’t match, your life insurance beneficiary designations will win out every time. This is because a life insurance is a contract and will always be enforced as it is written.
Call Today
To find out more about our flexible term life insurance coverages, and how our licensed agents can help you designate the right beneficiaries, contact us at 1-844-974-2020 or fill in our online contact form.
