How To Choose a Beneficiary for Life Insurance in Florida?
Some essential parts of owning a life insurance policy in Florida are choosing an appropriate beneficiary and keeping those choices up-to-date. For instance, your initial choice can change due to different factors like the birth or adoption of a child, marriage, or divorce. Hence, it is important to always review your named beneficiaries as life events change. Here is how you can choose your beneficiaries:
- Consider the purpose of purchasing the policy and make it the driving force for determining your beneficiaries.
- Be specific about whom you choose as your beneficiary, and ensure you state how the death benefits will be distributed in the case of multiple beneficiaries.
- Avoid choosing pets and minor children as life insurance policy beneficiaries because children under 18 years lack the legal capacity to manage wealth, and pets do not have account numbers.
- State a trusted adult that will be responsible for your minor children and pets when you are gone.
Who Is a Beneficiary in Florida Life Insurance?
A life insurance beneficiary is a person or entity you designate to receive your policy's death benefits. Possible beneficiaries include relatives, spouses, children, and charity organizations. Insurers pay the death benefit of insureds who refuse to name a beneficiary to their estates. Life insurers recommend that insureds should have both primary and contingent beneficiaries. The death benefit is paid to the primary beneficiary at the insured's demise. However, if the primary beneficiary is missing, directly involved, or an accomplice to killing the insured, or is dead, the death benefit will be given to the contingent beneficiary. If upon investigation, the insurer discovers that the contingent beneficiary is involved or an accomplice in the death of the primary beneficiary, the death benefit will not be paid out.
Who Chooses the Beneficiary?
Policyholders are responsible for choosing beneficiaries for their life insurance policies.
How to Change a Beneficiary?
Changing a beneficiary is easy, especially if you have a policy with a revocable beneficiary. In such a case, you can change the beneficiary at any time without telling them. In contrast, you need the beneficiary's consent if you have a policy with an irrevocable beneficiary. Follow the following steps to change your policy’s beneficiary:
- Reach out to your insurer
- Request a change of beneficiary form
- Fill out the form
- Ensure you accurately spell out the full names of all your beneficiaries and provide their Social Security numbers
- State how you want the death benefits to be distributed if you name multiple beneficiaries
- Submit the beneficiary form to the insurer
Who Should I Name as My Life Insurance Beneficiary?
Be careful when deciding who will receive your death benefit from your insurer because you will not be around to change your beneficiaries after your demise. You want to ensure that your loved ones are well taken care of when you die. Hence, do your due diligence to list reliable adults as beneficiaries. To leave money behind for your minor children, ensure you name trustworthy trustees and custodians who will cater to them. Also, you can designate a caretaker as one of your policy beneficiaries who you can trust will take care of your pets. Furthermore, you can list a charitable organization as your policy beneficiary.
Who You Should Never Name as Your Beneficiary?
You should never name the following as your policy beneficiary:
- Your estate: Listing your estate as your life insurance beneficiary can prevent your loved ones from getting a full death benefit payout. This is because the amount you leave behind will be subject to probate, where a judge determines your outstanding debts. Your loved ones can only access the death benefit after your creditors have been settled.
- Minors: Listing a minor as your policy beneficiary complicates the death benefit payout process because the person is not of legal age. The court might be forced to appoint a guardian to hold on to the funds until the minor turns 18.
- Your pets: Your insurers would not have anyone to pay your death benefit to if you list your pets as your policy beneficiaries because they do not have bank accounts and can not manage money. You can name a caretaker as one of your policy beneficiaries that would be responsible for your pets when you pass away.
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