Congratulations on making your first step towards safeguarding your dependent’s future. The critical part is over, but you’ve yet to make another lifelong decision that can cost you peace if you are not careful enough–choosing a life insurance beneficiary. Not sure what a beneficiary is? How to pick one, and why you should discuss it with your family? Adams Insurance & Financial will help you get all the answers.
What is a Life Insurance Beneficiary?
A beneficiary is simply the person or entity you want to receive and benefit from the wealth you leave behind in your life insurance policy. When you purchase your life insurance policy in Northwest Arkansas, you will be asked to name two people or entities as your beneficiaries. It is a critical part of the policy. After all, beneficiaries are the reason you’re buying the policy in the first place.
Who Can Be My Beneficiary
Anyone can be your life insurance policy. It can be your family, friend, neighbor, organization, business partner, or even a trust. It’s essential to note that some insurance companies limit the number of beneficiaries you can name. However, if you have to name all of them, it is critical that you determine the percentage each should get to avoid conflict.
Difference Between Contingent and Primary Beneficiary
Every life insurance policy comes with two entries for beneficiaries. You must add a primary beneficiary and a contingent beneficiary. The primary beneficiary is the first name to receive the death benefit if you die, but if the primary beneficiary dies before you, the secondary, also known as contingent beneficiaries, will receive the death benefit.
At Adams Insurance & Financial, we care about what you value. We are here to help you understand your policy better, so you can obtain enough coverage for the people that matter to you. Call our Northwest Arkansas agents, and they will be happy to help.