When you purchase a life insurance policy, you sign a contract that guarantees your beneficiaries a death benefit payment when the insured person dies. If you don’t know what a beneficiary is, keep reading.
What Is Life Insurance?
Life insurance guarantees a death benefit payment when the insured person dies. You can choose who receives the payment and how much you want the payment to be. Though, there are limits to how large your death benefit can be. The amount of your death benefit depends on your health status, age, and gender at the time of applying for coverage.
What Are Life Insurance Beneficiaries?
Life insurance beneficiaries are people who are chosen to receive the death benefit payment when the insured person dies. You can choose anyone to be your beneficiary, though selecting a family member makes the most sense. Suppose the person you initially selected is deceased or unable to be found. In that case, it helps to list secondary beneficiaries as a backup. These secondary beneficiaries will receive the death benefit if it is not possible to provide it to the primary beneficiary.
What Do Beneficiaries Get?
Your life insurance beneficiaries will receive your policy’s death benefit payment when the insured person dies. How much they receive depends on what is stated in the insurance contract. If you like, you can also choose to have the death benefit disbursed to a trust, which will manage the funds after your death. Through a trust, you can dictate who receives how much money and when they receive it.
Choosing Life Insurance Beneficiaries
Choosing your life insurance beneficiaries is important. When making your selection, think about who will be impacted when you pass away. If you have children, consider giving them the money they need for school and housing. Similarly, your spouse may need additional support replacing your income after you die. Even a business or charity can make a good beneficiary, so think closely about where you’d like the money to go.
Get Help Choosing Beneficiaries
If you have many people depending on you, choosing your beneficiaries can be difficult. That’s why SBHS provides free consultations to people like you.
To get started with a free life insurance quote and consultation, call (844) 657-0231.
