Life Insurance Beneficiary Decisions: Who Should Inherit?
Guide to making life insurance beneficiary decisions. Ensure your insurance benefits go to the right people.
Life insurance is an important part of financial planning. Choosing the right beneficiaries ensures your family is protected.
Primary vs. Contingent Beneficiaries
Your primary beneficiary receives the death benefit if they're alive. A contingent beneficiary receives it if the primary beneficiary has died.
Who Should Be Your Beneficiary?
Common choices include spouses, children, parents, or trusts. Consider who depends on your income and who you want to provide for.
Naming Minor Children
If you name minor children as beneficiaries, consider naming a guardian to manage the funds until they reach adulthood.
Updating Beneficiaries
Review your beneficiaries after major life events like marriage, divorce, or the birth of children.
Beneficiary Disputes
Clear beneficiary designations prevent disputes. Make sure your designations match your will and overall estate plan.
Tax Considerations
Some beneficiary choices have tax implications. Consult with a tax professional or financial advisor.
Trust as Beneficiary
Naming a trust as beneficiary can provide more control over how the death benefit is used.
Employer-Sponsored Life Insurance
If you have life insurance through your employer, make sure your beneficiary designation is current.
Use the End of Life Playbook to organize your life insurance and beneficiary decisions.