When you consider your term life insurance, you typically want to think about who your life insurance beneficiaries will be. Beneficiaries could be your spouse, children, and/or your estate. A beneficiary from life insurance may get a death benefit without potentially having to pay tax on the payment. Life insurance beneficiaries could get quick access to the lump sum, which may be very helpful for them. Go to this page to read more about some of the best life insurance.
You may also choose to set up a trust. A trust helps you put money aside and a trustee manages the account, which can be helpful in assisting a loved one already struggling with the emotional loss.
In preparation for beneficiary declaration, you also have the option of choosing children and charities instead of a spouse or partner. Scott Webb, a writer for the ZanesvilleTimesRecorder website, offers tips on this process along with some warnings such as naming a child under 18 as a beneficiary for term life insurance in cases of divorce. In such an instance, you should typically be comfortable with the money being handled by a former spouse.
When you name a beneficiary through a retirement account or a term life insurance policy, you typically should do it quickly and list both primary and contingent beneficiaries. You should also consider preparing a will to protect your assets. You may want to review your choice of beneficiary every 10 years and think about how the person could manage the payout. Teach your life insurance beneficiaries how to save money in a retirement account instead of spending their entire payout. To read more about the advantages of term life insurance, check out the article “Benefits of Term Life Insurance.” <hyperlink: article 65>