Naming your beneficiaries is an important decision that many people don’t give enough consideration.
Should something happen to you, you want to be sure the right people receive your benefits. Not naming a beneficiary, or not giving enough thought to your listed beneficiaries, means your insurance benefits could go through your estate when you pass, potentially causing unexpected tax consequences for your intended beneficiaries.
A little planning can help make sure your life insurance benefits are distributed exactly the way that you intend.
- Check your policy to ensure your designated beneficiaries are accurate and up to date.
- Consider naming more than one beneficiary or naming a contingent beneficiary. Otherwise, should your beneficiary pass before you do, a judge may have to decide how to distribute the benefits from your life insurance policy.
- Be sure to specifically name your beneficiaries (rather than simply listing “my children”, for example.) Not doing so may lead to problems after you pass, particularly if you have a blended family or if one of your children dies before you.
- Update your beneficiary designations after any change in family status.
- Revisit your beneficiary selections annually to make sure they’re still current.
Keeping your beneficiaries updated will give you peace of mind knowing that your loved ones will be provided for as you intended.