If you’re in the market for life insurance, chances are good that you’re interested in providing an income or financial windfall to your loved ones. In other words, you already know who your beneficiaries are, right? Before you say yes, consider this:
What Do You Want Your Money to Do?
Leaving money for the living expenses, educational expenses and other costs for your minor children, is always a challenge, but it becomes even more challenging if you are no longer married to the other parent of said children, or if the other parent predeceases you. Naming your children as beneficiaries will assure that the money goes to your children, but it’s probably a good idea to appoint your children a guardian, if necessary, and leave specific instructions in your will as to the dispensation of your life insurance policy.
Are You Making Settling Your Estate More Difficult?
It’s a common mistake that spouses seeking life insurance policies make – assuming that there’s no need to designate contingent beneficiaries, since, after all, you have every intention of leaving everything to your spouse. The problem is, if your spouse predeceases you, and you then pass without having changed your beneficiary, your money goes to your estate. If you have multiple children or other heirs, you may have inadvertently caused a family feud. Always designate contingent beneficiaries.
Are Your Wishes Clear?
For those who wish to make a significant contribution to a charitable organization or other institution through the proceeds of a life insurance policy should take pains to make sure they identify the organization or institution definitively when designating a beneficiary. Identify the organization by name and address, and, if there’s any question of the legal name of the organization, speak with a representative to be sure you’re clear.
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