If you’ve made it through the process of comparing life insurance quotes, good for you! You’ve taken a giant step in protecting your loved ones by applying for life insurance. Preparing for the unexpected in life is always better than leaving your loved ones to pick up the pieces.
You may think that assigning someone to be your life insurance beneficiary is a no-brainer, but choosing a beneficiary can be a little tricky; maybe even trickier than comparing life insurance quotes. We’re here to help you avoid mistakes and to make sure your loved ones aren’t left with a mess.
10 Beneficiary Mistakes to Avoid After You Get Your Life Insurance Quotes1) Choosing a Minor as a Beneficiary
If you are a single parent with young children, know that life insurance companies will not pay your life insurance policy proceeds directly to your minor children. Instead of naming a minor child as a beneficiary, set up a trust that benefits the child and name the trust as the beneficiary of the policy. Or you can name a reliable adult who will act on behalf of the minor’s benefit.
» Learn more: Can a Minor Be a Beneficiary?
2) Giving Money Without Conditions
If you name your young adult children as beneficiaries without putting any conditions in place, problems could arise. For example, say a life insurance policy owner dies unexpectedly and leaves his 18-year-old son with millions in death benefit money. This situation might be very overwhelming for a son as he probably wouldn’t know what to do with it all. Setting up a trust that states how much money and when it should be given would be wise.
3) Believing a Will Trumps the Policy
Don’t think that updating your