Life Insurance Beneficiary

Life Insurance Beneficiary

Life Insurance Beneficiary

All life insurance policies require the insured to list a beneficiary on the policy. The beneficiary receives the proceeds from the policy in the event of the death of the insured.

Probate

• A major benefit of naming a beneficiary on a life insurance policy is the beneficiary receives the proceeds from the policy without the need to go through the probate process, which is the legal process of divvying up the proceeds. If an estate is named as the beneficiary, the estate must go through probate.

Specifics

• Broad generalizations such as "spouse" or "children" when listing a beneficiary on an insurance policy can lead to payment being received by ones other than those intended by the insured. For instance, if the insured lists a spouse as a beneficiary, a former spouse may receive the proceeds. It's important to specify a spouse and children by name.

Regular Review

• Regular review of life insurance policies include changing beneficiaries on an as-needed basis to insure that payment goes to the intended person. Updating the beneficiary on a policy should occur whenever there are life changes such as divorce or the birth of a child.