Life insurance: who do I name as beneficiary?
Life insurance: who do I name as beneficiary? The reason to have life insurance is to alleviate the financial situation of loved ones who survive us, especially those who depend on our income, such as children and spouses.
However, naming the beneficiary is not always easy. In the case of married couples with children, the most common is that the spouse is named as the beneficiary since he or she will be in charge of protecting the children. If there is a fear that the couple may also pass away, then it is also necessary to also name a designated beneficiary. It can be a godfather, a grandfather of the children, or an uncle.
Things change if the couple does not have children. Typically, the spouse is named as the beneficiary and as the contingent beneficiary, the father of the deceased, a sibling, or a non-profit organization.
For their part, single parents often name their children as beneficiaries. You just have to pay attention to one key aspect, insurance companies cannot distribute the money to minors. If you want the child to enjoy the financial benefit during his minority, it is necessary to designate a beneficiary as legal custodian, a person he trusts, and also the minor himself as beneficiary.
It is important to understand that you can name as many beneficiaries as you want. Only the death benefit would be split proportionally.
On the other hand, it is advisable to inform the beneficiaries about the existence of life insurance and that they will be entitled to death benefits. You should also share the name and location of the insurance company, as well as the policy information. Keep in mind that once you leave, you can’t fix any loose ends you leave behind. Life insurance: who do I name as beneficiary?