A life insurance beneficiary is the person or entity you name in a life insurance policy to receive the death benefit. You can name:
- One person
- Two or more people
- The trustee of a trust you’ve set up
- A charity
- Your estate
If you don’t name a beneficiary, the death benefit will be paid to your estate.
One of the world’s most influential fashion moguls, Karl Lagerfeld, just passed away and may have dedicated a large part of a $300 million fortune to his pet cat. This has a lot of people undoubtedly thinking, “Who would I leave everything to if I died unexpectedly?”
While there are many ways to ensure the loved ones you leave behind are taken care of, financial security is a top priority in estate planning. One of the core avenues of providing this coverage is through a life insurance policy. Not only can this coverage be used to cover major expenses such as funeral costs or outstanding debt, but it can also provide longer-term support like supplementing income lost with the passing of a breadwinner. Regardless of life stage or family structure, if you have people who depend on you, purchasing a life insurance policy guarantees them financial support should something happen to you. Then there’s the task of determining who in your circle needs this coverage, how much of it and for how long.
Do you have a spouse or partner who depends on you?
Do you have children that need to be taken care of?
Will your parents be covered?
Choosing a beneficiary isn’t always a clear-cut decision, but a financial advisor can help you answer these questions.
(Source: Forbes)