081921 How to Choose a Beneficiary…

A life insurance beneficiary is the person who can claim the death

benefit after you pass away.

You can name multiple beneficiaries and decide what percentage

they each will receive when you die. Additionally, you should add

contingent beneficiaries who will receive the death benefit if your

primary beneficiaries have died.

 

Not everyone names people as beneficiaries. Some people name

trusts. By creating a revocable living trust and naming it as the life

insurance beneficiary, you can ensure that the money is used

according to your wishes. For example, the trust money could be

used to take care of children.

 

If you decide to name a trust the beneficiary of your policy, make

sure to work with an attorney to structure the trust correctly. It’s also

wise to work with a financial planner so that a trust is part of your

larger financial plan.

 

It’s crucial to update and review your beneficiary selections regularly.

For example, life events such as a marriage or a divorce can impact

your selection.

 

To update your beneficiaries, contact your life insurer and submit a

change of beneficiary form. Making changes only on a will won’t

affect life insurance.

 

How Does a Beneficiary Make a Claim?

Claims can be paid quickly… assuming the insurer has all the

documents it needs. Don’t assume a life insurance company will

contact you. It’s unlikely they know that your relative died. While some

insurers are proactive in monitoring for insured customers who have

passed away, they won’t discover a death immediately.

 

Death certificate…

To start the claim process you’ll need to submit a certified copy of the

death certificate. The insurer won’t send it back. Therefore, you may

want to request a few certified copies if you need them for multiple

purposes.

 

Contact the insurance company right away…

While you may have a lot on your plate after a loved one passes away,

the sooner you contact the insurer, the sooner you can get the money.

 

 

Verify you have met all claim requirements…

Once all of the claim paperwork is done, make sure you have all

supporting documentation attached. This can include a claim form and

death certificate.

 

Claims are typically paid within 30 days after the insurer receives the

necessary documents. You don’t need an original copy of the life

insurance policy to make a claim. You only need to know the name of

 the insurance company and contact them to initiate the claim. 

A policy number is also very beneficial to expedite the claim.

 

That’s why it’s important to let your beneficiaries know that you have a

policy and tell them the name of the insurer. And insurers are contractually

obligated to pay only the people listed on the policy.

 

https://www.forbes.com/advisor/life-insurance/how-it-works/#22527ac27f30

  

Edited by H.C.