You likely already know that a life insurance policy will offer your family a payout at the end of your life, cushioning them against your funeral expenses, end of life medical costs, outstanding debts, and the loss of your income. Do you know how it is decided who gets what, though?
In order to name specific people that you would like to receive specific amounts from your policy, you need to designate them as beneficiaries. Many people name a spouse or only child as a primary beneficiary, meaning that individual gets the entirety of that life insurance’s benefit. If you do decide to name a primary beneficiary, it’s a good idea to name a contingent beneficiary as well. This person can step in to claim your benefit should your primary beneficiary be unable to do so.
If you would like to divvy up your benefit, you can name multiple beneficiaries. You’ll have the option to divide your policy according to your wishes (e.g. everyone named gets an equal portion, your spouse gets 50 percent and your children split the remainder evenly).
If you plan to give your children the benefit of your policy and they are still minors, you will need to either set up a trust in their names that they can claim when they come of age or name an adult custodian to take care of the funds in the interim.
Of course, in order to name the right beneficiary or beneficiaries, you need the right life insurance policy. To talk to a dedicated insurance agent who can help you pick the best policy to protect your loved ones and what they value most, contact SeniorChoices NW, serving Wilsonville and the neighboring Oregon cities.