A beneficiary is the entity or person who gets your assets or keeps your assets after you die. For example, the death benefit from your life insurance. However, there are many things that you need to consider when selecting your life Insurance beneficiary or beneficiaries. Remember, a beneficiary is your personal choice and will completely depend on your financial and personal circumstances.
Who can be a beneficiary?
Generally, people name their wife, husbands or children’s as the beneficiary of their life policy and it makes a good sense because they are the people who will be most impacted with many problems if you die. Today, a husband or wife is the most common beneficiary designation not only in Calgary, but everywhere, but you can designate a non-legal partner or another beloved one as well. If you select a non-spousal beneficiary, then a spousal waiver will be needed. There is no formula available that works for everyone, but we are providing some major tips that will help you in identifying your beneficiaries.
Points to Consider When Choosing a Life Insurance Beneficiary
- You have to give yourself some time when choosing your life insurance beneficiaries. There are many factors that you need to consider as it is an important decision and you will want to ensure to take as much time as required to consider about your life insurance beneficiaries. If you are working in a company, you must request some additional time from your HR manager to let your spouse or lawyer check all insurance and other forms with you so that you can be completely satisfied of the insurance benefits as well as what rights you and your family have regarding life insurance.
- First you have to decide whether you want your beneficiary or beneficiaries to be a person, individuals or trusts. If you have choices like a revocable living trust or irrevocable life insurance trust, then you have various purposes. Making trusts as your beneficiaries is beneficial because if you give money directly to people’s names as beneficiaries, then they have to pay tax on your estate if required, and this can create problems for those individuals and others in future.
- Don’t make a small child or children as your beneficiary. For example, There are uncounted numbers of insurance companies in Calgary and some of them do not pay a death benefit to children under the age of 18 directly. The best way is set-up a trust as the beneficiary so that a trustee you sign up can manage the money for the kids who are minor to get the death advantage.
- Choosing beneficiaries is a personal and individual decision, but extremely important. You must consider factors like personality or financial requirements. Chose a person who is very close to you, whom you can trust with close eyes to be your main beneficiary. You can choose your spouse or parents.
- Always double check your selected beneficiary or beneficiaries by imagining the most horrible case situation. If you consider the worst thing that could occur, then who will be left the most helpless? Will the person you have selected share the death benefit with other beneficiaries or need to think someone else as your primary beneficiary.
Choosing a beneficiary is one of the most significant steps in receiving your life insurance coverage in place. You purchased the policy to make sure that the person (s) you selected would receive those benefits when any unforeseen occurs. You can be sure that you have chosen your beneficiary to meet your requirements with the help of these tips that are listed above.