Wednesday, August 11, 2010, AM | 1 Comment
Of course, the best time to name a beneficiary or beneficiaries is when you buy life insurance. Think about who will benefit when you are “deleted” from the surface of the earth. When you are archived in that huge database up in the sky somewhere. It’s not a good description of saying after you have passed away. But I say it for the reason that many folks have a hard time buying into life insurance. Of course, you must be able to afford the premiums.
With a life insurance policy, your family can use the proceeds to
- Help replace lost income
- Eliminate debt
- Pay for college
- Address other financial needs while they adjust to a new life.
Keep the following points when appointing your beneficiaries:
Don’t appoint your estate…
Don’t leave the proceeds of your life insurance to your estate. The court system is all backed up. It will take a considerable amount of time that your beneficiaries will ultimately get the money. Instead select specific beneficiaries, such as your family, so they can receive the proceeds immediately.
Choose your wordings carefully. Name the beneficiaries by name. If, for example, your wife is pregnant at the time, you might want to think about leaving something for the baby who may be born after your demise.
Review beneficiaries frequently…
Review your policy and beneficiaries regularly. Experts suggest to review your coverage every year or after every major life event. That way it will ensure that the policy continues to help provide adequate protection for your beneficiaries.
You can choose to review it at the time of
- Your annual salary increase or
- Cost of living increase or
- During tax season when all your records are on the table, so to speak.
In a Nutshell
Many people could benefit by having life insurance. When someone else is depending on your income, there is generally a need for life insurance. Make sure you appoint beneficiaries whomever you wish to include and review your policy regularly.