Life insurance is often a complicated topic for many people in Colorado Springs, CO. Of course, no one wants to talk about death, fights among beneficiaries, or the emotional and financial trauma associated with losing a breadwinner. However, it’s always prudent to be prepared financially in case of these unfortunate events. At Westco Insurance LLC, we recommend learning about life insurance, including beneficiaries, to get the most out of your policy. Here is what you need to know about a life insurance beneficiary.
What is a beneficiary?
A life insurance beneficiary is any person or entity you choose to receive money from your insurance company as a death benefit when you pass away. You can name one person or several people (up to 10). It can be your spouse, parent, stranger, charity, trustee, a business in Colorado Springs CO, or anyone you want to benefit from your money.
Types of beneficiaries
Life insurance beneficiaries come in two types or “levels”—primary and contingent beneficiaries. The primary beneficiary gets the death benefit if they are available after your death. The contingent beneficiary can only receive the death benefit if the primary beneficiary cannot be found. You should provide clear information to avoid disputes after your death. For instance, if you have named your child the primary beneficiary, indicate whether they are the firstborn and include their exact name, age, and other relevant information.
Revocable and irrevocable life insurance beneficiary
If you choose a revocable beneficiary, it means you don’t need any consent from the current beneficiary to change their name. On the other hand, if you choose an irrevocable beneficiary, you’ll need to seek their permission before changing their name as the beneficiary.
Don’t forget to let your chosen beneficiary have all the information they’ll need to file a claim after your death. If you have any questions or need to learn more about life insurance beneficiaries, feel free to contact Westco Insurance LLC anytime.