What it Takes to Qualify as a Beneficiary

What it Takes to Qualify as a Beneficiary

A beneficiary is the person designated to receive the proceeds of a life insurance policy in the event of the death of the insured. The beneficiary is named in the policy itself. What does it take to qualify as a beneficiary and what should you know about naming a person as your beneficiary?

To qualify as a beneficiary, a person needs to have an insurable interest in the insured. This means that there must be some sort of relationship between the beneficiary and the insured, and that the beneficiary would suffer some form of loss in the event of the death of the insured. In many cases this is a spouse or other close relative but it could also be a business partner or even a business itself.

While a minor can be the beneficiary of a life insurance policy, they may not have access to the actual proceeds until attaining legal age. If the intent is to have proceeds benefit a minor, it is better to have a trusted friend or relative of legal age be beneficiary to administer the funds if your wishes are to establish a trust in the name of the minor.

Many married couples will name each other as beneficiaries, which may be understandable, but could cause problems if both were to die in the same accident. This is where a contingent beneficiary can be useful. A contingent beneficiary is secondary to the main beneficiary, and would receive the proceeds only if the main beneficiary is not alive or otherwise incapacitated. Naming a contingent beneficiary is a good way to help ensure proceeds will not go into the estate.

One of the challenges with beneficiaries is making sure they are up to date. Life happens and major changes to our lives may occur to warrant a beneficiary change. These changes my include a marriage, divorce or death in the family. Like all of your insurance policies, life insurance coverage should be reviewed occasionally for accuracy and to determine if coverage is still sufficient.

If you would like to have a life insurance policy review, get a quote on life insurance, or perhaps have an entire insurance protection overhaul, we invite you to contact us. As independent insurance agents, we are qualified to review the policies from any company for just about any type of insurance.

How will you know if you are paying too much unless you compare? We would be glad to assist you.


Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder

Buzz Your
Insurance Agent

Search for a local agent with our agent finder map.

Agent Finder

Search All Blogs

Search
Generic filters
Exact matches only
Search in title
Search in content
Search in excerpt

Buzz Your
Insurance Agent

Search for a local agent with our agent finder map.

Agent Finder

Want to learn more about
our blog writer?

Read more about KayLynn's background.

Search All Blogs

Search
Generic filters
Exact matches only
Search in title
Search in content
Search in excerpt

Life Insurance: Why Waiting Limits Your Options

Waiting to purchase life insurance just may limit your options. Here’s how to maximize your choices when buying life insurance.

Five Cents a Week for Life Insurance? Wait…There’s more!

There Was a Life Insurance Version of the Milk Man and Home Doctor Visit

The Difference Between Term Life Insurance and Permanent Life Insurance Explained

This is a Great Way to Start with Life Insurance

A Closer Look at the Life Insurance Waiver of Premium Benefit

Many Life Insurance Policies Contain a Powerful, Hidden Benefit

Can I Buy Life Insurance if I’m Dying?

Insurance Can’t be Secured Following a Calamity. The Time to Act is Now

The Two Biggest Factors That Make Life Insurance Rates Increase

Age and Health Are the Biggest Contributors to Increasing Life Insurance Costs

Life Insurance: Buy What You Can Afford

Buying a Large Amount of Life Insurance May Be Pointless If You Can’t Afford It

Why an Independent Agent is Your Best Option for Life Insurance Quotes

Choice is Good. It’s Just One Reason an Independent Insurance Agent May Be Best for You.

Getting Married? Now’s a Good Time to Consider Life Insurance

Marriage is one of those benchmark times when you should have your life insurance reviewed. We can help.

Why Life Insurance Should Be a Fundamental Part of Your Financial Plan

How Are You Protecting Your Money Machine?

Leave a Comment