Tag: life

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.

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Life insurance is designed to pay the death benefit to the beneficiary selected by the policyholder. However, questions can arise when a listed beneficiary passes away before the policyholder. Understanding how this situation is handled can help ensure the death benefit reaches the right person.

Contingent Beneficiary

Many policies allow you to list a contingent beneficiary, sometimes called a secondary beneficiary. This person receives the death benefit if the primary beneficiary has passed away or is otherwise unable to receive the payout. Companies like Senz Insurance Agency Inc. can help you add or update contingent beneficiaries at any time.

If your primary beneficiary designation includes multiple people, such as several children, all primary beneficiaries must be unable to receive the benefit before the contingent beneficiary is considered.

Beneficiary’s Children

Some life insurance policies include a clause that passes the death benefit to the beneficiary’s children if the beneficiary dies before the policyholder. This depends on the policy’s wording and whether the payout is distributed per stirpes or per capita. If this is important to you, speak with an agent to ensure your policy is structured correctly and avoids unnecessary delays or probate involvement.

When the Death Benefit Goes to Probate Court

If no living beneficiaries are listed, the death benefit typically becomes part of the policyholder’s estate. When this happens, the payout is processed through the probate court in Beloit, WI. Probate may use the funds to pay outstanding debts before distributing any remaining amount to heirs.

This process can delay payouts and reduce the amount received, which is why keeping beneficiary designations updated is so important.

An agent at Senz Insurance Agency Inc. can help you review your policy and ensure your beneficiary arrangements reflect your wishes. Contact us today. We proudly serve the Beloit, WI area.