Every life insurance coverage requires you to name the beneficiary of the life insurance policy. This means that the beneficiary only receives payment for life insurance coverage in the event of your death.
Your recipients can be:
- An individual
- Multiple individuals
- A farm
- A trust
Life Insurance Recipient Tips
Here are some basic points to know about calling life insurance policy recipients along with some helpful tips:
- Be aware that you can name more than one recipient. You can name one or more recipients or more recipients. You’ll usually be asked which share of payments is most likely for each person—in certain circumstances, you can set 70% for a spouse and 30% for an adult child.
- Be sure to name additional recipients. Think about additional recipients, or contingents, as backup. He gets a life insurance policy payment if the primary beneficiary is no longer alive when the payment has been made.
- Be specific by name. It is best to list the names and Social Security variations of each beneficiary rather than something generic like “my children”. This will prevent complications and speed up the payment process.
- Keep your receiver in the gap. Tell the recipient of your life insurance policy about your plan and provide a duplicate of the plan.
- Review your life insurance coverage and its beneficiaries annually. Along with an annual plan review, you’ll want to review your life insurance coverage after a significant life event such as a marital relationship, birth, separation, or death.
Unique Receiving Factors to consider
Think carefully about the following unique factors to consider when calling the recipient.
- Analyze how small offers. Providing for children is a big reason many people buy life insurance policies. Most people refer to making through the mother and father or companion as the beneficiary, with the understanding that the payment will help cover the costs associated with the child. But that’s not a chance if you’re a widow or if you and your spouse or partner pass away at the same time. In these circumstances, it is best to appoint a highly credible adult trustee as the beneficiary or to deal with an attorney to set up a dependent managing and dissolving the funds. Whatever you do, don’t identify the child as a beneficiary—the law restricts anyone from receiving life insurance policy payments if they are not of age (which can be 18 or 21 depending on your specifications).
- Talk to a lawyer if you actually have a child with a disability or special needs. You will want to arrange a life insurance policy for a child with disabilities or special needs in a way that does not affect his or her qualification for certain federal government programs such as Medicaid. The best way to do this is to work with a lawyer to arrange child support.
- Avoid referring to your real as the recipient. Calling your real estate the beneficiary is a bad idea because it leads to the lengthy (and possibly expensive) legal process known as probate. Therefore, it is a good idea to name a person, individual or company as a recipient of a life insurance policy.
- Be aware that there are several ways to benefit from charity. Leaving money to a non-profit company is one of the reasons individuals get life insurance coverage. There are 4 ways to get a charitable benefit: by calling it a beneficiary; by producing it both the owner and the recipient of a life insurance policy; by including a charity giving biker into a life insurance policy; and by functioning with environmental structures.
- Get help with various other unique circumstances. The impact of tax liability and various other problems can occur if the policyholder and the insured are not the same person. Similarly, if you live in a neighborhood, specify and don’t name your spouse as the recipient. Avoid the hassle by relying on your insurance representative or attorney for advice.
Get help with call recipients and with all life insurance policy points by contacting a certified insurance representative who can guide you through the entire process. If you don’t have a representative or consultant to work with, check out our representative locator. You can also work directly with insurance providers. The following are corporate partners who support our charitable causes and can help you obtain protection directly or through their representatives or advisors. The key is to start today.