The entire existence of life insurance companies is veritable proof of the fact that life is unpredictable. While you can create policies covering every outcome, you can’t control the people involved. That’s why choosing your life insurance beneficiary is a bit more complicated than choosing someone you trust.
Our team at Franklin Life And Annuity in Houston understands that contemplating one’s own mortality is never comfortable, but we assure clients that their needs in life are always at the forefront of our advice. We are sensitive to monetary needs and restrictions, as well as the immense pressure of having to single out one person as a beneficiary who you trust with nearly everything.
We work with some of the best insurance companies across the country to give you easy access to the best plans right here in Texas. We can help you understand how you can use your plan to protect loved ones always. In the case of life insurance, a sum of money will be remitted to the individual you named a beneficiary without being subject to probate.
This means that it’s a faster and clearer way of leaving assets to someone than writing them in a will because estate distribution can be slowed down by red tape and can be disputed. However, there’s more to choosing a beneficiary than choosing someone you trust to use your capital as you see fit. Here are a few things you should consider before putting down a name.
From family life insurance to burial and final expense insurance, policies are extremely diverse and sometimes convoluted. The best companies will make sure that you understand all the implications of your choices when you make them but should make sure to clarify what you don’t understand—for example, insurable interest. The person you choose has to have an insurable interest in you.
This means that there has to be proven financial interest between you. In this case, if you own a business, for example, and you contribute to financing it, you can name the business as a beneficiary. On the other hand, if you’re supporting a spouse or children, even partially, they qualify as having insurable interest. However, if you have multiple dependents who you’d like to support, then explain this to your insurer. They’ll likely be able to explain the best course of action and outline any restrictions your policy may have.
In some cases, naming someone as a beneficiary for life insurance might disqualify them from other benefits.
Whether you choose an individual or an entity, it’s important to check in every few years to make sure that you don’t want to update it. Things like marriage, losing a loved one, or even having a child might change your perspective, and this should be reflected in your plan. A reliable life insurance company will always be willing to revise the policy when necessary, as we understand the gravity of these documents.
Nevertheless, it’s still prudent to name a second beneficiary, just in case you’re unable to update the plan. In case of extenuating circumstances, like the passing of the first beneficiary, funds will still seamlessly transfer to the second one.
Many life insurance agencies or plans won’t allow you to name a minor as your beneficiary, but even if they do, it’s better to create a trust where the money will go to said minor once they come of age. They may not be able to manage the money, and with a trust, you could assign a trustee to invest the funds on their behalf.
At Franklin Life And Annuity, we can walk you through all of our options and plans. We offer burial insurance, final expense insurance for seniors, and death benefits. We always work with clients to ensure that they get a plan that suits them financially, and we provide insight into tough decisions. To get in touch with our life insurance company in Houston, call us today at 281 688 8166.