Life Insurance Policy – When Should You Update The Beneficiaries? Wondering when you should update the beneficiaries of your life insurance policy?
This article will really be of help. Continue reading below.
Of a truth, one of the important parts of assembling any life insurance plan is deciding who your beneficiary will be.
As it is dependent upon the reason and essence of the policy, the beneficiary could either be your spouse, child, business partner or an NGO/Charitable organisation, etc.
As it is with any other form of stages of life planning, life insurance policies need to be examined from time to time so as to make sure that the beneficiary of your choice at a particular time is still the right choice, else, it could bring about some big problems when it it is finally time for you to settle your assets.
Benefits are payable to an already dead relative, an ex-husband or wife, or to all or maybe just one of your children, so when the changes of life roll around, it means that the beneficiary description on your life insurance should be re-examined and if necessary, changed if the supposed beneficiary who was eligible is no longer fit to be your beneficiary.
Also, if you think that the supposed beneficiary will simply do the right thing by handing over the money to the person who is now fit to be your beneficiary, THINK AGAIN!
Below are some of the common changes in life that may necessitate a re-examination of your insurance policies:
1. The birth or adoption of a child or grandchild:
You have recently given birth or your spouse who was pregnant has given birth, or you adopt or are willing to adopt, or you child recently or suddenly becomes a parent, then you should consider reviewing your beneficiaries to include the new addition to your family
2. A change in your marital status:
If you have recently gotten married, an examination of your policy’s beneficiary is necessary. If you have recently divorced, you may also want to change your beneficiary or beneficiaries. It is important o note that in some situations, the original beneficiary (ex-husband or wife) has to give his or her consent to his or her name being taken off your list of beneficiaries.
3. Your beneficiary ends up dying before you:
Funny but true. As we all know that life is unpredictable, anything can happen at any time. Your beneficiary may end up passing on to the after-life before you. In this case, you must have had another person in line to be the beneficiary, so if you do not want the second-in-line to become the overall beneficiary, then, review your policy.
4. You have a change of mind:
You may have a change of mind for so many reasons. Maybe the previously named beneficiary is no more eligible or no more your choice of a beneficiary. When this happens, consider reviewing your policy.
Do not forget to look at both individual and group plans. The reason for this is that you could have a group plan through your boss/employer and the proceeds could be worth a good amount of cash for a beneficiary too.
When Should You Review Your Plans?
Seeing that life insurance is an investment, it is very crucial to critically examine your insurance coverage regularly. This should be done once a year or constantly if a big life event takes place.
Meet with your insurance advisor from time to time to make sure that your policy’s plan are all in order to cover those it is intended to cover with the right amount of benefit and to also make sure that those who are not included in the coverage are not on your policy’s list.
This is a sound and wise financial planning and it also helps averts problems such as family squabbles in the future.
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