Wednesday, April 22, 2009

Life Insurance and Beneficiaries

Posted by: Dan Hughes

Life insurance policies are very difficult things to choose to get. For many people, life insurance policies are useless and are not necessary to have. However, if you are a person that does, in fact, need to write up a life insurance policy, there are several things that they need to consider, such as what type of policy. Should you get term or permanent? If you need permanent, then you need to consider among whole, universal, current assumption whole, and variable life insurance. Another thing, which is as important, if not more, to decide is who your beneficiary will be.

The beneficiary of a life insurance policy is the person who receives the payment of the amount of insurance after the death of the insured. It’s often easy to pick the “natural choice” as your beneficiary or beneficiaries, which includes your spouse or your children. However, these may not always be the best options. As with your spouse, there is a possibility of divorce, and, if you do not update your policy, then she and possibly a new spouse will reap the benefits. Similarly, with children, depending on the wording, it may be accidentally including or excluding certain people. Probably the safest choice for your beneficiary is your lawyer, if you have one, and draw up a list of how you want the money to be distributed. The lawyer will make sure that your money is handled the way you intended.

It’s always important to remember that the wording is the most important part in the policy. If it is not specific, then, as mentioned before, people may be included or excluded from the policy. By just stating children as beneficiaries, you may be leaving our grandchildren when you intended for them to get some money.

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  1. Couldnt agree more, you must be specific in your policy.

    Peter Topperwien

  2. It is always advisable to consult with an insurance professional, before you decide on a type of beneficiary as well as naming your beneficiary to your life insurance policy.

  3. Lot of things able to know about the life insurance. All credit goes to you. I am purchasing life insurance for my self. Is it fine if you choose beneficiary as my friends instead of choosing someone from blood relation.

  4. It is true that Life insurance policies are not as simple as it sound therefore i also advise everyone to read carefully of Life insurance policies. But they must have to get one.
    life insurance