The next step after purchasing life insurance is choosing a beneficiary. Designating a beneficiary ensures your insurance benefits go to the individual(s) you want to help most after you’re gone. The following tips from Calhoun Risk Management in Minneapolis, MN can help you make wise decisions in this matter.
Consider Your Immediate Family
If you have a spouse and children, consider how they would fare if you were to suddenly pass on. Life benefits can provide much-needed financial support for these loved ones, so they’ll be well taken care of after you’re gone.
Make Provision for Minor Children
Another way to make provision for your children is to set up a trust and have benefits placed in the trust specifically for your children’s needs. If you choose this route, you’ll need to name a guardian for the trust and specify how funds will be dispersed to meet your children’s immediate or future needs.
Review Your Options
If your spouse and children are well provided for, review your options for who else you can support after you’re gone. Younger siblings, aging parents, a business partner or a favorite charity all make good beneficiary options. You could even divide benefits among several of these options.
Select a Backup Beneficiary
Choose a contingent beneficiary to receive policy benefits in case your primary choice passes on before you do. This saves you time and trouble in repeating the process.
Update Your Beneficiary Choice When Necessary
Update your choice of a beneficiary to reflect major changes in your life. Singles may want to change their beneficiary from their parents to their spouse after getting married. A divorce could prompt you to change your beneficiary from your ex-wife to your children or another member (s) of your family.
For more information about life insurance coverage, choice of beneficiaries and cost, contact Calhoun Risk Management in Minneapolis, MN.