When it comes to selecting a life insurance policy, one of the most important aspects is choosing who will be your beneficiary. There is a lot of elements to this issue to consider since you could name any person, organization, or even pet as a beneficiary of your life insurance. Once you think about it, it might be a harder choice than you originally expected. Here is a breakdown of the main considerations when choosing a beneficiary.
Think of Expenses
Although you might technically have limitless options when choosing a beneficiary, practicality will narrow your choice down a lot. In most cases, life insurance will cover the cost of your funeral and any outstanding debts first. After that, you should think about who in your life will have the most need for life insurance. If you have young children, then they might need the money for college someday, for example. Once you identify who will be left with the most expenses that you won’t be there to pay, that might help you decide how your life insurance will be best used.
Avoid Personal Bias
There’s nothing wrong with wanting to put your loved ones first when you choose a life insurance beneficiary. However, you need to remember to think logically, as well. If you have more than one child or several younger siblings, don’t name only one of them as the beneficiary if you want everyone to have a portion. Even if you trust and like them the most, you won’t be here to see how they will divide the money, or whether they will keep it to themselves. The unfortunate truth is that money matters can tear families apart, so it’s important to stay as objective and fair as possible.
Revise Your Will
Naming a life insurance beneficiary is very similar to writing your will. However, you should make sure that your life insurance policy and will don’t contradict each other. If you want to name one person as the main beneficiary, then you should update your will to be the same person. Otherwise, you should be very specific about why you distinguish different people as beneficiaries.
Get in Touch with Wachter Insurance
Whether you need homeowners’ insurance or auto insurance, our team at Wachter Insurance Agency, Inc. is here to help. We offer all of our clients competitive rates, professional customer service, and a huge range of policies to choose from for your needs. We have been serving Maryland, West Virginia, Virginia, Pennsylvania, and the District of Columbia since 1969 and we would love to help keep your home and family safe every day of the year. For more information, give us a call at (301) 371-6335 or visit us online. For more blogs like these, follow us on Facebook, Twitter, and Pinterest.