Don’t Forget to Add a Contingent Beneficiary

Adding a Contingent Beneficiary

Don’t Forget to Add a Contingent Beneficiary

There are many different types of life insurance. When you look up quotes online, you’ll find out about all the different kinds of coverage that are available to policyholders. For example, if you purchase a term policy, you’ll only be covered for the number of years you agree to when you first buy the policy. A whole or universal policy is a kind of permanent insurance that lasts until you die. There is no time limit before the policy lapses. As long as you keep paying money, you’ll be able to get the benefit.

Even if you purchase one of these basic kinds of insurance from a trustworthy life coverage agent, you’ll have a lot of specific options. Every person’s life insurance policy is a little bit different, because policies are written to cater to the policyholder. This is the reason it takes some time to underwrite your policy when you first apply for it. In addition to knowing how much coverage you want to have, you’ll also want to figure out who you’re going to name as your beneficiary. This is the person who will receive all of the money you’ve been paying when you die.

Learning Basic Terms

Once you know the basics about life insurance, you’ll have enough information to make a good decision about which provider to purchase coverage from. You’ll want to compare the quotes from the different companies to make sure you’re getting the most insurance for the lowest price. If you can find a good deal from a reputable company, you won’t have to worry about your family being provided for if you die unexpectedly. It’s never too early to start researching, even if you aren’t buying a policy until later in your life.

You don’t need to become an insurance expert in order to purchase a life policy. You’ll want to make sure that you know enough to understand the type of coverage being offered to you. Perhaps you are offered coverage by your employer. Maybe your spouse wants the two of you to get a policy together. You can purchase a first to die policy and leave the money to the remaining spouse, or you can get a second to die policy and name a beneficiary that isn’t you or your spouse. Any way you go about getting coverage, you’ll want to ensure that you choose a beneficiary carefully.

Naming Your Beneficiary

When you first name the beneficiary for your life policy, you want to let them know. You don’t want to die unexpectedly and have your family confused about who gets the money and how they are supposed to receive the benefit from the insurance company. You want all of your affairs to be in order when you die, so you want to name your beneficiary when you first apply for the coverage. Most people choose to leave their spouse and children with the money, but it depends on your life. If you don’t have a spouse, who will you leave the money to?

Perhaps you’ve named someone on your policy, but you aren’t sure if they are going to outlive you. If you only have one beneficiary who dies before you, your policy could lapse. For this reason, you might want to think about adding a contingent beneficiary to make sure that the money goes to the right place and not back to the insurance company. The contingent beneficiary is the person who gets the money in case your primary beneficiary doesn’t outlive you. A lot of people name one to make sure someone gets the benefit when they die.


Originally published at All About Life & Health Insurance.