Insurance Maze Blog

Feb 2

Life Insurance & Beneficiaries

Category: Life Insurance post

February 2, 2008

If your beneficiary designations aren’t clearly defined in the life insurance policy, there could be complications at your death and your desired wishes might not come to pass. When you make application for life insurance, review the application to insure the beneficiaries are exactly the way you want them.

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Knowing How To Make Beneficiary Designations Can Prevent Complications

Types of Life Insurance Beneficiaries

Primary Beneficiary

Most people understand that they must name a beneficiary when buying life insurance. The idea is to have the proceeds of the life insurance policy paid to the beneficiary upon the death of the person insured. But what happens if the beneficiary dies before the insured person?

Contingent Beneficiary

Naming a contingent beneficiary (or second beneficiary) in a life insurance policy will insure that the proceeds of the policy are paid to this beneficiary if the primary beneficiary dies before the insured.

Upon receipt of your life insurance policy, review the beneficiaries again and if they are incorrect, get them changed immediately.

Also, keep in mind lifestyle changes like - death of a named beneficiary, adoption of children, marriage into a family with step-children, or divorce could make your beneficiary designations out-of-date. This is a very important part of an annual life insurance review.

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