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Did you know your life insurance beneficiary can be a person, more than one person, a trust, or even an organization?
You can also allocate different percentages to multiple beneficiaries and designate contingent beneficiaries if your primary beneficiaries are unable to receive the benefits.
When considering your beneficiary options, it helps to start by making a list of the people and organizations who would be financially affected if you were to pass away. This list might include a spouse, a significant other, children, grandchildren, other dependents, pets, or even your business.
The people you care about may rely on life insurance proceeds to cover things like mortgage payments so they don’t lose the house, as well as daily living expenses, medical costs, education expenses, outstanding debts, and funeral costs.
When to Use a Trust
If you want life insurance proceeds to go directly to your children, it’s a good idea to work with an attorney to set up a trust. A trust includes rules and a designated trustee who manages the funds, ensuring your child receives money according to your wishes until they reach legal age and can take on that responsibility themselves.
A trust can also be a good option if you want to provide for a pet’s care after you pass.
Primary and Contingent Beneficiaries
A primary beneficiary is first in line to receive the death benefit. A contingent beneficiary receives the proceeds if the primary beneficiary has already passed away before you.
Updating Beneficiaries
Major life events like marriage, divorce, or having a child are all good reasons to review and update your beneficiaries. Work with your agent at Senz Insurance Agency Inc. in Beloit, WI, for help setting up your life insurance beneficiaries.
Reach out to us at Senz Insurance Agency Inc. in Beloit, WI, for all your life insurance needs.
