Estate and Trust

Life insurance beneficiaries are those you designate to receive the benefits of the policy. Different states have varying requirements as to who can be a beneficiary such as those who have an insurable interest in your life or are related to you. If there is not such a person whom you wish to have as your beneficiary, you may name your own estate as such. The benefits will be distributed with other assets as designated by the will. You can name as many beneficiaries as you want. It is important to first understand what type of beneficiary is right for you. A revocable beneficiary can be changed any time, while an irrevocable beneficiary can only be changed with his or her consent. A primary beneficiary is the person or entity who receives the proceeds before all others. Secondary or contingent beneficiaries are those who receive the benefits only if they survive you and the primary beneficiary. Such persons are important in case you and the primary die simultaneously, in which case it is treated as if the beneficiary died first, causing the benefits to flow to your estate. Naming a beneficiary is as simple as indicating the individual or entity on the application. Changing a beneficiary is done by filling out a beneficiary designation form provided by your insurer. It is important to name both primary and contingent beneficiaries because they will receive the benefits almost immediately after your death. Without naming these individuals or entities, the benefits of your life insurance policy are subject to probate - a timely and expensive process that will certainly cause undue delay.