How to Choose Beneficiaries - National Educational Services
 How to Choose your Life Insurance Beneficiary

How to Choose your Life Insurance Beneficiary

An essential part of purchasing life insurance is choosing your life insurance beneficiary – which is the person (or entity) that will receive the cash benefit from your policy after you pass away.

Naming Your Life Insurance Beneficiary

For your life insurance beneficiary, you can name: 

  • One, two, or more people
  • A trust, with the proceeds administered by a descendant or trustee
  • A charity
  • Your Estate

When you designate your life insurance beneficiaries, you have the final say over who receives your death benefit. And if you don’t choose a beneficiary, your State’s law determines who will get it.

Do I need a Primary, Secondary, and Tertiary beneficiary?

Picking a beneficiary for your life insurance policy is a very personal and challenging decision. Some people look at it as a way to use a death benefit to protect their loved ones, as a vehicle to pass down wealth, or some might consider it a financial transaction.

Luckily, you aren’t forced to choose three people for your life insurance policy, you only need to pick one person, but it’s up to you to decide if you want one or more beneficiaries.

Questions to ask when choosing a beneficiary:

  • Who will need the extra money when you pass away?
  • Who receives the proceeds if none of your beneficiaries survive you?
  • Are there people who depend on you for financial support?
  • Should the assets pass to your Estate? Or in a trust?
  • Who are the people who will bear certain expenses after your death?
 
For answers to these questions read our blog posts titled, “Are You Leaving Your Money To The Right Person?” and “How Much Life Insurance Do Teachers Need?”

Other Factors to Consider

Standard rules for State or policy life insurance:

Your State or current insurance carrier might restrict who you can name as a beneficiary.

For instance, if you are married, your spouse may have to sign a waiver before you can call someone else as the beneficiary.

Changing beneficiary designations:

Many life insurance policies let you change your beneficiaries at any time.

So make sure to review your policies regularly, and don’t forget to make appropriate modifications when your life changes – like getting married, having children, or moving your kids out of the house or back in after college. 

Be prepared today for your loved ones tomorrow.

You don’t have to figure out life insurance beneficiaries by yourself. Speak with a Counselor at National Educational Services for expert advice on your specific needs. 

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.

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