Choosing a life insurance beneficiary is an important decision that only you can make. Knowing the facts can help you make wise decisions that will benefit those you love most.
Types of Beneficiaries
There are basically two types of beneficiaries: primary and contingent. Your primary beneficiary is the individual or individuals you choose to receive the benefits of your policy upon your demise. If this person or persons die before you, proceeds will go to your contingent beneficiary.
There are numerous options for beneficiaries to your life insurance policy.
Family: If you’re married, your primary beneficiary would probably be your spouse and children to provide them with financial support after your demise. Other family members to include parents, siblings, uncles, aunts, etc. could also be named as beneficiaries, if you desire. When naming more than one beneficiary, it’s important to stipulate how the funds will be divided to avoid misunderstandings.
Minor Children: Minor children can’t receive death benefits directly making it necessary to name a legal guardian as your beneficiary on their behalf. This guardian will manage the proceeds of your policy until your children reach legal age. Your Allegiance Insurance Agency agent can help guide you through the legalities of this process.
Estate: You can name your estate as the beneficiary of your life insurance policy by specifying this in your will. The executor of your estate will receive the proceeds and distribute them in accordance with the instructions in your will.
Other: If you have a favorite charity, you may want to name it as your beneficiary. If you’re the co-owner of a business, you may designate your business partner as beneficiary so he can continue the business you started together in Richardson, TX after you’re gone.
To learn more about life insurance beneficiaries, policies and costs, contact Allegiance Insurance Agency in Richardson, TX.