A beneficiary is designated recipient of a will, retirement savings, or life insurance policy. This is usually one (or more than one) family member, but a beneficiary can also be a non-family member, a trust, a charity, or an estate.
Who should your beneficiary be? A life insurance policy exists to financially protect your loved ones. It’s not an easy situation to think about, but making a smart plan is important to protect your family in case you are not here.
You can split your benefit up however you choose. You can even elect backup or “contingent” beneficiaries to receive funds should your primary beneficiary be unable to do so. Courts may charge fees if they have to rule on a dispute. So, it’s important to be as clear and concise as possible with how you want your assets distributed to avoid confusion and delays.
Depending on your wishes, this could begin to get complicated—quickly. The good news is that you don’t have to figure out all of this on your own. Our agents are experts, and they can walk you through each step, helping you carefully consider your options, so you can be sure your loved ones are taken care of exactly as you intended.
There’s no single answer to this question. It depends on your particular life insurance policy or will. To start, you’ll want their full legal name and their relationship to you (child, spouse, father, brother, etc.)
Providing as much information as possible will ensure that there is no confusion about your wishes, that your beneficiaries can be found, and that your benefits will be distributed in a timely manner.
If you can, add information like:
If you don’t make it clear who you want to receive your benefits when you pass, then your assets may enter a legal process called probate. Each state has different laws on the order of inheritance, and a court must figure out how to distribute your funds. This can lead to significant delays and confusion among your relatives at a time of great sorrow. It can also lead to court fees, possibly taxes, and payments that reduce the amount your family receives. For life insurance policies, your benefits will generally go to your spouse first, then in order: your children; your parents; your siblings; and, finally, your estate.
If your beneficiary information is thorough and there are no mistakes in the documentation, it is very difficult for anyone to change your intended wishes. When issues arise, it is usually because it isn’t clear who should receive a benefit. This could happen because of poor wording or, more often, because something has changed that your will did not take into account.
Situations like these can lead to confusion and potential legal battles over your assets. The best way to make sure there are no mistakes and that most eventualities are covered is to consult a life insurance agent or an estate attorney.
Usually, it’s a simple process to change your life insurance beneficiary, and you’re encouraged to keep your beneficiaries up-to-date as your life changes. There are certain legal instances when a beneficiary cannot be changed, but these are rare. If you’re unsure how to update your policies, an agent will be able to point you in the proper direction.
You can make changes whenever you like, but major life events are often a good time to reevaluate your policy and beneficiaries. If you’ve recently married, divorced, lost a loved one, or welcomed children or grandchildren, that may change how you want your wealth to be distributed when you pass.
We also understand this is not something you think about every day, and it shouldn’t be. So, we recommend adding a yearly calendar reminder to check in and consider your options.
The months after losing a loved one are never easy. There are many difficult tasks you must do in a time of grieving. One of them is to understand if the deceased had a will, life insurance policy, or other assets that need to be properly distributed.
Every year, millions of dollars in life insurance benefits go unclaimed for a variety of reasons. Often, the family just doesn’t know about it.¹
To find out if you are a beneficiary of a will or life insurance policy after your loved one has passed, there are a number of steps you can take:
If the deceased has named an executor of the estate, that person should have information on life insurance policies and how assets should be distributed.
Wills and other funds often go into a legal process called probate, where a court helps decide how assets are split according to local laws. Generally, the county court where the deceased last lived is the first place to look for information.
If money goes unclaimed, insurers are required to transfer it to a state-run account. There are a number of places to search these records online for free. You can then contact the state’s unclaimed property office and start the process to claim your funds.
If you think there’s a chance you may have a will or life insurance funds that you haven’t received, don’t give up. With the right help, you can claim what is yours. Our agents understand the life insurance process and have helped countless individuals. We can help you, too.
Related: Learn more about life insurance
By simply asking this question, you are taking the right steps to make sure your family is protected when you pass.
Many employers offer small life insurance policies as a benefit, but that may not be enough to ensure your family’s stability after you’re gone. Considering additional protection is an important part of everyone’s financial journey.
If you would like help creating a will or adding a life insurance policy, talk to an Agent. They will help you carefully consider all of your options and align your goals, so your wishes are clear and your family is protected for the long term.
1 National Association of Insurance Commissioners. 2020. “Millions In Life Insurance Benefits Go Unclaimed Annually.” InsuranceNewsNet.