Have you Updated the Beneficiary Information on Your Life Insurance Policy?

Do you have a life insurance policy? If you don’t, you need to consider getting one. These policies make certain your loved ones have the funds to cover your funeral expenses. However, once you have a policy, you need to make certain you keep it updated. Here are some reasons why this is so important.

Your Family May Have Changed

If you have married or met someone you plan on spending the rest of your life with, are they listed on your life insurance policy? If they are not the beneficiary, it doesn’t matter what their relationship is to you. They won’t receive the payout if you die. You may also want to change your beneficiaries if you have children or if you adopt. If one of your beneficiaries dies, you will need to remove them from the policy.

You Gain Assets or Get a Second Life Insurance Policy

You may also want to change your beneficiaries if your assets increase or if you decide to take out a second policy. In this case, you may plan on leaving certain assets to specific heirs. If those assets are of significant value, you may want another heir to receive more of your life insurance to balance things out. The same is true if you get a second policy. You may want to split the two policies differently according to your heirs’ needs.

What if You Do Not Update Your Beneficiary Information?

If you die without updating your beneficiaries, there are several things that could happen. First, some insurance companies will ask you to list contingent beneficiaries. These people receive your life insurance if the primary beneficiaries are all deceased. For example, you could name your spouse as your primary beneficiary and your children as your contingencies. If you did not name any contingencies or if all of your listed beneficiaries are deceased, the insurance company will pay out to your estate. It is then up to probate court to determine your heirs and distribute the money either according to your will or according to the law.

Do you need help with your estate planning? You want to make certain you have everything covered so that your heirs and beneficiaries receive what you want them to. The Gandhi Selim Law Firm is here to help. Contact us today to make an appointment.