In order for any life insurance policy to be taken out, the policy holder must name a beneficiary. This beneficiary would be entitled to the payout should the policy holder die during the term of the insurance. Selecting the appropriate and correct person to be the beneficiary is a very import stage of the process. Essentially a beneficiary could be anyone that you wish to designate. It is usually divided between those that are financially dependant on the policy holder. If this person is married, then it is usually their spouse. It can also be children or parents of the policy holder, and may even be another sibling, depending on their circumstances. It is important that the beneficiary designations are worded correctly to ensure that there are no confusions or problems once the policy holder has died. Incorrect wording could result in the proceeds going to a person not intended to receive them, and this could cause great problems. An example of this is that if the policy stated that the main beneficiary was listed as ‘husband’ or ‘wife’ then the payout could be given to an ex-spouse for who is was no longer intended. Also, if the beneficiary was listed as ‘children of the insured’ this would not necessarily include a spouse’s child from a previous marriage who was meant to be included. This is why it is so important to ensure that the wording is correct. It is also a good idea to check the beneficiary list from time to time to ensure that it is current and correct. After a divorce for instance this will often need to be changed. It is also usual practise do designate a contingent beneficiary. This is to ensure that if the original beneficiary predeceased you there would be someone else in place to take this role. Ultimately it is up to the life insurance policy holder to decide, and as such it is important for this decision to be taken with great care and consideration. There can often be unforeseen complications with such things that can cause a lot of tension and problems in the aftermath of a death. Family connections can be difficult and it is important that you do not forget everything into place. The most important thing is to ensure that those who are most financially dependant on you receive what they need to survive. If you have a spouse, then they will usually be the ones left with the responsibilities of paying the bills and bringing up any children you may have. It is common sense really, but it is always worth making sure that things are as they should be. It becomes a little more complicated when you wish to make the beneficiary more than one person. This means that you need to decide how much will go to each person. If you have children and grandchildren, you will need to decide whether the grandchildren will receive any money directly or whether this will go to the parents (your children). My Insurance Expert will help you find term life insurance that fits all of your individual needs. The world of life insurance doesn't have to be difficult. With the right advisor you can give your family the protection they need and have peace of mind.
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