What is a Beneficiary? When you have a life insurance policy, and you’ve been keeping up with your premiums, your insurer will pay out a death benefit when you die. But when you’re dead, you won’t receive it. Instead, the benefit goes to someone who you designated with the insurance company, such as your spouse. That person is called a beneficiary. According to Colorado insurance brokers, your beneficiary can be your family member, friend, business partner, charitable organization or a legal entity like a trust or your estate. Types of Beneficiaries:
When selecting multiple beneficiaries, you’ll need to make sure the percentage split between all beneficiaries in a category totals up to 100%. Boulder life insurance has made this easy for you. How to Change the Beneficiary? #1 Annual Review Generally, life insurance agents do the annual review for you. Colorado Insurance brokers will do an annual review for you if you don’t have any brokers or agents. If you do not have an agent who is doing an annual review for you then you can take initiative to do that by
#2 Check the Changes One has to check what has changed? Because a simple name change of the beneficiaries can have a drastic change in the outcome you had planned for the purchased policy. What to consider?
#3 Tax-Free? Life insurance provides a tax-free benefit to the beneficiary of the policy. A married couple has a new baby, they get busy in taking care of the newborn and forget to review their life insurance policy. There are two possibilities to review it:
In the above two possibilities, if both spouses pass away at the same time then there is no use of it. And if your kid is at the age below 18, he/she cannot receive a death benefit from the policy. And the benefit will not transfer to anyone tax-free. Therefore, if it is the case of a minor, then assign a guardian, so that the benefit can be received. Or you can ask Colorado Insurance Brokers to make sure you are making the best beneficiary designations. #4 Beneficiary Name Change Form Filling the new name change beneficiary form can be confusing. Therefore, one can ask their agent/ broker to help them fill it. Steps are as followed.
#5 Confirm the Changes As now you have made all the changes correctly and as per your requirements, remember to check it thoroughly and confirm that the information has been updated and is listed as you needed. Many people avoid this step and then face issues. Conclusion One must understand all the steps before changing the beneficiary of your policy. Consider several reasons why you want to check and change the beneficiary on an annual basis. Take enough time before you start. If in doubt, ask boulder life insurance company and take help from them. Also Read: Everything You Need To Know Before Buying Life Insurance for Parents
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