Educators: Are You Leaving Your Money to the Right Person?
Deciding who to leave your money to can be a tough decision and a MAJOR decision at that. If you’re married, it will likely go to your spouse, and if you have children, then they may be next in line.
But even simple scenarios like this could go amiss, and that’s why it’s important to examine your beneficiaries on all of your accounts!
In this article, we will uncover some nuances that go along with choosing beneficiary designations.
If you have questions, it’s FREE to speak with a Counselor at National Educational Services, and we can help you better understand beneficiary designations and life insurance.
If you’re a teacher, you’ve worked hard your whole career ensuring that children become educated. And as a benefit of this work, you can receive a pension when you retire.
Now, what happens if you pass away and your survivors become eligible for benefits? Will it happen the way you imagine?
Some people might say beneficiary designations can be somewhat a minor part of a life insurance policy since it’s not going to affect you in your lifetime. But we beg to differ.
If you don’t choose your beneficiaries now, it can significantly impact your dependents down the road.
Let’s break down leaving money for your loved ones who survive you:
1. After every significant life event, you should review all of your current beneficiary designations.
Review beneficiary designations on your pension, life insurance policy, other insurance products, and retirement accounts (IRAs, 403b, 401k, etc.).
Chances are, during landmark events (for example, marriage, divorce, birth, or death), there could be people listed on those accounts that no longer fit. So, make sure to review it! Make any changes if necessary, and then move on to the second tip.
2. Suppose you list the wrong beneficiary on your accounts.
Usually, you can list people for many life insurance policies, or you can list a trust.
If you choose to list a trust as a beneficiary, either a dependant child or someone who is disabled can be designated as beneficiaries of that trust and they get paid benefits. If your three children are the beneficiary of that trust, they will not get the survivor benefits.
3. What if there’s NO beneficiary listed?
Now, sometimes it’s getting harder and harder to do this now because if it’s a retirement account, you must list a beneficiary if you want that account. And if it’s your pension, TRS has now incorporated a default to make it your spouse or your dependents.
What if you want your pension to go directly to your dependents, instead of your spouse?
Remember that if you didn’t list it – it’s not going to happen! That’s why educators must double-check to make sure that your life insurance policy reflects your wishes and your beneficiary designations.
Speak with a Life Insurance Counselor today!
If you wonder if you have set up your beneficiaries correctly, we’d be happy to review them with you during a free consultation. Fill out the form below and we will get in touch!
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