Once the unfortunate event occurs of you dying, your beneficiaries are stuck with enough grief. The last thing they want to do is find out you have a life insurance policy, and it will now be held up in probate. This is something that can easily occur if you do not have your life insurance beneficiary information set up properly. Here are four reasons you may make it difficult for your life insurance beneficiaries.
1. Not Telling Anyone About Your Policy
The entire point of having a life insurance policy is so that someone is protected financially. If you never tell anyone this policy exists, who it's with, and how they can access it, there is no guarantee anyone will get paid.
2. Not Having a Backup Beneficiary
The insured person on a life insurance policy is not the only person that can take the policy out. So if a person takes out a policy for their niece and the policyholder passes away, there is no one named as the beneficiary if the niece passes away. At this point, the policy payout is left up to probate.
Probate could be a long process to figure out as well as expensive. So the money put forth in probate court is now going towards attorney expenses. In the meantime, having a contingent beneficiary the money would have been paid out to help with funeral expenses or other bills.
3. Not Completing a New Form
If you have a completed beneficiary form at home and decide to make updates, making these updates and initialing them will not be valid in court. Even if a few people have witnessed these recent changes you've made, it's not like initialing a deposit slip for the bank. Verified and legal changes should be made to your life insurance company's beneficiary update form. When the original is on file with them, it is then deemed legal and valid.
4. Misspelling of Names
By all means, ensure you have the proper spelling and suffixes for any beneficiaries. It's always suggested to have the social security numbers listed as well. This makes it simple to distinguish if the sole beneficiary is a Junior or Senior.
The above four reasons can make it difficult for your prime beneficiary to receive your life insurance payout. Since you are going through the expensive process of paying this monthly premium, take a few moments to ensure you have your beneficiary information completed accurately. If you're looking for a life insurance agency in your area, visit Creamer Insurance Agency, Inc.Share