Can I Name Multiple Beneficiaries, and How Does That Affect the Policy?

You finally made the decision to purchase life insurance. Now comes the most important part: who do you give the proceeds to in the event of your death?

When you purchase life insurance, you need to designate at least one beneficiary. This is the person who receives your death benefit. But what if you have multiple people in mind? Can you choose more than one person?

Yes, you can. It is a good idea to have backup beneficiaries listed anyway, in case one dies before you. You have flexibility in how you allot the proceeds. For example, you can split the proceeds equally among multiple beneficiaries or allot certain percentages, as long as the total equals 100%.

You can name anyone you want as a beneficiary, as long as they are adults. Most people choose their spouse and/or children, but you can choose other family members as well, such as siblings, parents, nieces, and nephews. Some people also name charities, trusts, and close friends as beneficiaries. While you can name your estate as a beneficiary, it is not recommended, as this will put the estate in probate, which is a lengthy and costly process that you will want to avoid if possible.

What to Keep in Mind

When choosing beneficiaries, be specific. Use their full names and Social Security numbers. Some policies and insurers set rules for naming beneficiaries.

If you have minor children, think about how to effectively provide for them. Beneficiaries must be at least 18 years old, so most people name a surviving parent as the beneficiary, with the understanding that the payout will help cover child-related costs. But that may not happen if you are widowed or if you and your spouse or partner pass away at the same time. In situations like this, consider naming an adult custodian as the beneficiary. You can also set up a trust to manage and distribute the funds.

• Be sure to review your policy annually to ensure the beneficiary designations are still accurate.
• Certain life events, such as marriage, divorce, births, and deaths, can prompt a change in beneficiary decisions.
• Once you name beneficiaries, make sure they are aware. It may be a good idea to give them a copy of your policy.

Because of these restrictions and potential for conflict, it is advised that you contact your life insurance agent if you have any questions or concerns about adding beneficiaries to your policy.

Contact Us Today

Life insurance can help pay for expenses after your death, but it can be complex. You may wonder what it all entails and if it is the right choice for you.

The Michigan team at Hartman Insurance Agency, Inc. can answer your questions about beneficiaries and other matters. We can find the right policy for your needs. Contact us via (734) 999-4190 or online here to schedule a consultation with our office.