Are Your Life Insurance Beneficiary Designations Up to Date?
Do you review your life insurance policy beneficiary designations regularly? If not, you may want to reconsider! We make New Year’s resolutions, spring clean and change the batteries in our smoke detectors without really thinking about it, but we rarely think about reviewing our life insurance policies. We bought it and then forgot about it. Not having the appropriate party named as your beneficiary could prove disastrous.
Named beneficiaries on life insurance policies generally supersede instructions in wills which is why it is important to keep your beneficiary designations up to date. Failing to update your designation during some of life’s pivotal moments (marriage, divorce, death of a beneficiary or birth or adoption of a child) may have consequences upon your death that may lead to hard feelings or lawsuits.
When naming the beneficiary for your life insurance policy, be specific. You are likely able to name several primary and contingent beneficiaries. This will help you spell out exactly how you wish the proceeds to be divided upon your death and will help to avoid any confusion. Remember that assets left to minors may be transferred to a custodial account until they reach the age of majority (age 18 in most U.S. states). You may want to consider naming a financial guardian or setting up a trust. You may want to talk to an attorney or an estate planner.
Last but not least keep good records! When you make a change to the beneficiary on your life insurance policy, keep a copy of the form and let your loved ones know where they can find it.
Bottom line - put thought and care into naming your beneficiary or beneficiaries making certain to review your insurance policy to make sure your designation is up to date and correct. The last thing you want for your loved ones upon your death is confusion and hard feelings, they’ll already be heartbroken!
About the author: Lauri Pella has been in the life insurance business for over 29 years. She is a fitness enthusiast who actively supports foundations like the American Cancer Society, and the March of Dimes. Lauri would love the opportunity to help your family have a peace of mind, knowing they have the right life insurance coverage. You can contact Lauri at 1-800-651-1953 or LPella@Pivot.com.