Choosing Life Insurance Beneficiaries
Choosing Life Insurance Beneficiaries is one of the most important decisions a person makes in his or her lifetime. Life insurance is, after all, meant to protect family and loved ones after we’re gone. While immediate family may seem to be the obvious choice, there may be other people and organizations which rely on you whom you don’t want forgotten.
Children and Spouse – For most of us these are the beneficiaries to whom most of our funds will go. It’s important to ensure you choose a policy that will not only cover their daily expenses such as any outstanding debts and mortgage payments, but also future expenses such as tuition fees for your children and a retirement fund for your spouse.
Parents – If your parents rely on you for help with expenses such as medical fees, prescriptions, or other living expenses, it’s important that you leave a portion of the coverage to them. This will give you peace of mind of knowing they’ll be taken care of.
Extended Family and Friends – Whether it be siblings, nieces and nephews, or close friends who rely on you for various expenses, ensuring that they are covered is also important.
Business Partners and Employees – If you own a business or are involved in any business ventures with other individuals, making sure that their interests are protected is extremely important. It’s also important that you have the necessary protections in place for any employees you may have to ensure they are not put in a difficult financial situation.
Organizations and Charities – If you offer financial support to any charities, organizations, or groups that rely on your support, making sure that it continues after you’re gone is an important part of taking care of your responsibility in estate planning. An easy plan is to allocate an amount similar to what you currently provide over a set period of years following your death.
There are many factors to consider when choosing life insurance beneficiaries. Before purchasing a new policy or when reviewing your current policy for an increase or change, reference the groups listed above and make a list of the individuals that apply to your situation. Circumstances change frequently so it’s a good idea to get in the practice of reviewing your life insurance beneficiaries list on an annual basis and be sure to contact your insurance agent with any additions, deletions or allocation changes.
For more information on choosing life insurance beneficiaries, please call 661-235-5885.