Life Insurance Beneficiaries

Life insurance is one of the only insurance policies that you do not buy for yourself. You invest in a life insurance policy to provide financial protection for your loved ones after you are gone. When you purchase life insurance, you will be asked to choose a beneficiary, which is the person or charity that will receive the death benefit, or payout of the policy. If you decide not to choose a beneficiary, the death benefit of your policy will be paid to your estate.

There are two different levels of beneficiaries to choose for your life insurance policy. The first is a primary beneficiary, who will receive the death benefit after you pass away, as long as they can be found. If your insurance company cannot find the primary beneficiary, the death benefit will then go to your contingent beneficiary. If both your primary and contingent beneficiaries cannot be found, the death benefit will be paid to your estate.

When you are naming your beneficiaries, you should provide as much information as possible to help them be identified. This can include their Social Security Number, which will make it much easier for them to be found, as well as help settle any disputes that may arise during the payout process.

When choosing a beneficiary, you should also specify how you wish the death benefit to be paid out. If you are naming multiple children as your beneficiaries, you should also include what should happen if one or more of your children pass away before they are able to collect the payout. The more information and direction you provide, the less likely it is that the money will have to go through probate.

To ensure that you have the right life insurance policy, no matter if you are looking for term life insurance or whole life insurance, contact Michelle Lim Insurance Services Insurance in Alhambra, California.