One of the biggest things regarding life insurance is who to choose for the beneficiary. You could choose a person, child, spouse or even a business partner.
Life insurance policies should be reviewed regularly to ensure that the beneficiary you do choose is still the right person at that specific time frame in your life. If not, it may cause some serious problems when it comes to handing your assets to someone else. Life can change, so you must review not only your life insurance policies, but also any IRA’s or 401K accounts you might have.
Some life changes that might require you to review your life insurance policy includes:
- Having a child or grandchild. You may name your children or grandchildren as the beneficiary however if you don’t specify names individually, then your assets will go to all the children and grandchildren.
- Getting married or divorced. If your marital status changes, you will also want to look at your life insurance policy. For example, if you’re getting divorced, you might not be able to change your beneficiary until the divorce is said and done. Some states will vary on what’s required.
- Your beneficiary may pass away. For these instances, you should have a backup person who become the beneficiary if something was to happen to your first chosen person.
- And then lastly you might have a few other situations that occur where you might change your mind on who the beneficiary is or other various situations that will cause you to make changes.
Always review your plans that you have individually or ones that you have through your employer. Go through these plans at least once a year.