Types of Life Insurance Policies
If you're considering buying a life insurance policy, during the process you'll need to determine who will receive the payout should something happen to you. It may sound like a simple decision, but there are several factors that could affect your choice. The right beneficiary can help ensure that your final wishes will be fulfilled; here's how to make the best possible choice.
A beneficiary is the person or entity that you designate to receive the cash benefit from your life insurance policy in the event of your death. A life insurance beneficiary could be a spouse, a child or another loved one, but it could also be a trust, estate or even a non-profit organization.
A beneficiary also doesn't have to be singular. While you can leave your entire policy to one person, you can also designate multiple people to receive portions of your life insurance payout. Your beneficiary can also be conditional, allowing you to elect a primary, secondary and even final recipient. What this means is that if your primary beneficiary is already deceased when you pass away, then a secondary beneficiary would receive the cash benefit. In that same vein, if both the primary and secondary beneficiaries have passed at the time of your death, your final beneficiary would receive payment.
How exactly do you choose each of these beneficiaries and what factors should you consider? There's a lot to reflect upon before you choose your beneficiary, including how exactly you want your cash benefit to be used if something were to happen to you. Here are 5 things to think about:
With many life insurance policies, you can change your life insurance beneficiary at any time. Review your policy often (at least once a year) and examine your circumstances. Have you married or divorced? Had another child? Has someone passed away? These could all be factors that would change your beneficiary.
You want your life insurance payout to land in the right hands, and we're here to help. To start your application, contact one of our licensed agents by calling 800-294-4544.