Choosing a life insurance beneficiary makes up a huge part of your life insurance policy, yet it still comes along with plenty of questions. Here are four common questions about life insurance beneficiaries, answered:
- How do I choose my life insurance beneficiary? Your beneficiary can be someone related to you, a close friend, or even a university. You can choose any one you would like to be your beneficiary as long as it is clearly stated in your policy. Make sure to also choose the amount each beneficiary will receive if you choose to divide your life insurance benefits. If you choose a minor as a beneficiary you will need to also choose a trusted adult to manage the money until they are no longer a minor.
- What happens if I do not choose a beneficiary? If you fail to choose a beneficiary, the state will choose how to distribute your funds. If you are uncomfortable leaving your money to the state, make sure name a secondary and tertiary beneficiary.
- Can I insure another person and list myself as the beneficiary? Life insurance policies generally come with a medical exam for whoever is being insured, making it difficult to insure another person without them knowing. Some states will make exceptions for people who rely on another for money.
- Are life insurance benefits taxed? If an estate is chosen as your beneficiary the state can tax them up to 45% of the benefit. If your spouse is your beneficiary the government will not tax them anything.
Young Insurance, in Burbank, California, will work hard to provide you with the coverage you need based on your unique situation. We are specialists ready to find a total insurance solution for your personal needs. Contact us today for more information.