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How Do I Choose a Beneficiary?

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Life insurance policies require that the policyholder name a beneficiary or beneficiaries. Those named as beneficiary to a life insurance policy will be entitled to the proceeds of the policy. For many people this choice is an obvious one being their spouse and/or children and once the names have been added to the policy they do not give it much thought. But the beneficiaries of your life insurance policy might need to be revaluated and even updated from time to time. Listed below are some considerations that should be evaluated before choosing beneficiaries for your life insurance policy:

• Do not name your estate as beneficiary unless you plan for the proceeds from the policy to be tied up in probate. If the proceeds will need to be used for immediate financial purposes name an actual person or people.
• Be specific if naming your spouse as beneficiary. Avoid putting only "husband" or "wife" in the place of your spouses name because that could allow an ex-spouse the right to proceeds.
• Naming your specific children's names could exclude any children you have in the future, unless appropriate changes are made after their birth.
• Consider naming a contingent beneficiary in the event that your primary beneficiary dies before you.

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