What Is Beneficiary Allocation?

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Beneficiary allocation is a financial term used to describe a very specific aspect of insurance policies. Learn about beneficiary allocation with help from a licensed insurance agent in this free video clip.

Part of the Video Series: Financial Planning
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Video Transcript

Hi, I'm Jonathan DeYoe with DeYoe Wealth Management in Berkley, California, and today I want to talk about what is beneficiary allocation. On every IRA insurance policy or TDA account, TDA stands for transfer on death, for all of these three types of accounts or portfolios, there is an opportunity to designate beneficiaries. There's a form called a beneficiary designation form that lets you set your beneficiaries for all three of these types of accounts. So beneficiary allocation is how much in terms of a percentage of the portfolio or the beneficiary amount in the insurance policy will go to which beneficiaries. For example, I'm married, I want to leave 100 percent of my insurance policy to my wife in the case of my death. My beneficiary allocation would be 100 percent to my wife. I'm married, my wife and I are both married actually to each other, as it happens, and what we'd do is we have two kids and let's say we both die at the same time, we make both kids 50 percent beneficiaries on our life insurance policies. So what is a beneficiary allocation? It is the amount of the asset or insurance policy we allocate to each beneficiary on our beneficiary designation form. Jonathan DeYoe with DeYoe Wealth Management in Berkley, California. Thanks for listening.


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