When it comes to a life insurance policy, naming a beneficiary is one activity that requires deep thinking. It is because we have breadwinners today with so many dependent on them, and it could be a child or a spouse.
The beneficiary of any life insurance account must be a compassionate, trustworthy, and responsible person who will be tasked with spending and distributing the life insurance payout. There are cases where changing a beneficiary is required, but who can change the beneficiary on your life insurance policy.
A life insurance beneficiary is a person you have listed in your life insurance policy as the receiver of the life insurance payout that you would leave behind when you eventually pass away. Changing a life insurance beneficiary is as simple as ABC because it is also the same as filling a new life insurance beneficiary form. Still, there are certain scenarios or cases where changing a beneficiary might be a bit complicating.
An essential part of getting life insurance coverage is choosing who would receive the money you want to leave behind. It is challenging because there is no easy way to sort through all the persons you have in your life to make the right choice on the one or two persons who would manage the money you want to leave behind properly.
No matter what approach you take when choosing a beneficiary, also know that you have the right to switch the person’s name if the need comes up.
Who Can Change The Beneficiary On A Life Insurance Policy
Changing the beneficiary’s name that you have on your life insurance policy is actually an easy process. All that is required of you is to send the details of the new beneficiary to your insurance company. However, we want you to note that having a backup beneficiary in mind is wise because you never know if the need to make a change would arise.
If you end up naming your spouse or partner as your beneficiary and the two of you end up dying in the same accident, it is up to the judge to decide who will get the payout. This situation would leave the family under lots of pressure because of the amount of time it will consume.
It is also very possible for an insured person to list a contingency beneficiary, either a primary and a secondary beneficiary. For example, your spouse might be listed as your primary beneficiary, while another person you trust could be your secondary beneficiary.
Another alternative you have is listing several beneficiaries and stating the payout percentage each of these beneficiaries should collect when you eventually pass away. However, naming a minor child or minor children as your beneficiaries would require you to list someone who would handle the funds on their behalf until they have come off age to handle the money you have left behind for them.
Revocable And Irrevocable Beneficiaries
Without or without his consent, you can go ahead to change a revocable beneficiary. Still, you would need the beneficiary’s written consent to effect a change in the case of an irrevocable beneficiary.
Therefore, when deciding your beneficiary, you should think deeply and decide which beneficiaries you would love to go for. Another thing that you need to do often is reviewing and updating your beneficiaries when needed.
Several changes in circumstances might lead to an insured person wanting to change his beneficiary list. First, however, you would need to speak with the insurance company if you want to change the beneficiary’s name listed on your life insurance policy.
Another piece of advice that we want to leave you with is you also have the option of seeking legal advice. It means that if you are not sure whether you can make the change or if you find the task difficult, then you can go ahead and consult with an estate planning attorney.