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How Do I Choose a Beneficiary?


How Do I Choose a Beneficiary?

A crucial step in purchasing a life insurance policy is choosing your beneficiary – the person (or entity) who will receive the cash benefit from your policy when you die.

Who, or what, can be a beneficiary?

You can name:

  • One, two or more people
  • A trust you've set up, with the proceeds administered by a trustee
  • A charity
  • Your estate

When you designate beneficiaries, you have the final say over who receives your death benefit. If you don't choose one, your state's laws determine who gets it.

Primary, secondary, or more?

Your primary beneficiary is first in line to receive your death benefit. If the primary beneficiary dies before you, a secondary or contingent beneficiary is the next in line. Some people also designate a final beneficiary in the event the primary and secondary beneficiaries die before they do.

How do I choose?

Selecting a beneficiary is a very personal decision. Some people want to use a death benefit to protect their loved ones, and other people look at it more as a financial transaction.

Who will need extra money when you pass away? Are there people that count on you for financial support? People who will bear certain expenses at your death? These are good questions to ask when choosing your beneficiary.

Can I change my beneficiaries?

With most policies, you can change your beneficiaries at any time. Review your policies regularly, and don't forget to make changes when your life changes, such as when you get married, have a baby or move a child out of the house − or back in.

Consider this

When naming beneficiaries, keep these factors in mind:

  • State or policy restrictions − Your state, or even the life insurance policy itself, may restrict who you can name as a beneficiary. For example, if you're married, your spouse may have to sign a waiver before you can name someone else as the beneficiary.
  • Who's last in line? − Who receives the proceeds if none of your beneficiaries survive you? Should the assets pass to your estate? Or would they be better off in a trust?

Ready to make a change?

Use this beneficiary change form (PDF) when you need to make a change.

Need help? You don't have to do it alone. Contact your investment professional today to discuss your specific needs.