How to Choose a Beneficiary

Life insurance offers support to those who survive you. Those receiving the proceeds from a life insurance policy are called beneficiaries.

Difficulty: Moderate

Instructions

Things You'll Need:

• Legal Services
• Life Insurance

1. Consider children first. They need food and shelter while they're growing up; other expenses, such as college, arise as they grow older.

2. Take extra steps to cover the requirements of a child with special needs.

3. Alert your attorney if you make your minor children direct beneficiaries so that your will can be tailored to protect their assets.

4. Always take into account the needs and obligations of your spouse.

5. Consider parents or other family members who rely on you for support.

6. Account for business or professional obligations that can be offset by life insurance.

7. Designate proceeds from specific term policies to pay off mortgages or other debts.

8. Share your wealth. Make your church, favorite charity or other cause a beneficiary.

9. Communicate your desires clearly to your lawyer, life insurance provider and whoever else may be assisting you.

Tips & Warnings

• You can name more than one person as a beneficiary and have them share the proceeds.
• Remember to name an alternate beneficiary in case the primary beneficiary does not survive you.
• Make sure you coordinate your prospective life insurance proceeds with the disposition of the remainder of your estate. A will is a must, especially if you have minor children.

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[Hadley]

on 4/21/2008 Yes, I believe when the policy is issued, you may want to choose someone with an "Insurable Interest" who relies on you for some form of financial support, or a charity.

And, after the policy is issued, you can choose to change the beneficiary named on your life insurance policy.

[choicearizona]

on 2/8/2008 http://www.arizonaautohomelifeinsurance.com/builderarizonacc/mesa/index.php

I am not so sure about the "anyone" comment but you can change it to anyone after issue. But before issuance, the insurance company can make sure it is someone with a vested interest.

on 11/22/2005 Though it is wise to choose your spouse, children and relatives, you can name anyone to be the beneficiary - your cat, a charity, even the U.S. Treasury.