If you’ve decided to take out a life insurance policy, you’ve already taken one of the most important steps toward protecting those you care most about. When you pass away, your life insurance policy will pay out to the beneficiary (or beneficiaries) you named during your lifetime.
For some people, the beneficiaries they select are obvious to them: their spouse and/or their kids. For others with life insurance, the decision isn’t always so straightforward – especially if they don’t know who they can actually designate as a life insurance beneficiary.
Naming a Person as a Beneficiary
As you might expect, you can name people as beneficiaries of your life insurance policy. For the most part, these individuals can be any person you wish to receive your death benefit as long as they are at least 18 years old.
Things can get a little tricky in community property states like California, where usually a spouse must provide their consent if someone wishes to name someone else as their life insurance beneficiary. That exception aside, there are pretty much no rules on who you can name as your beneficiary, be they a relative, friend, neighbor, etc.
Naming a Charity as a Beneficiary
Another option some people choose is naming a charity as beneficiary of their life insurance policies. Charities can include entities like churches that may have brought someone a sense of community during their life, or perhaps an organization fighting for a cause that gave the policyholder a sense of purpose.
The point here is that you don’t have to select people as your beneficiaries. If you do intend to name a charity, though, make sure it meets all of the necessary requirements to receive your death benefit!
Naming a Trust as a Beneficiary
Sometimes people want their life insurance benefit to pay out to a trust, like one set up for a loved one to use to remain financially stable. Such is the case for special needs trusts, which can be funded with a death benefit without affecting their eligibility to receive public benefits.
We Can Help with Life Insurance
If you still aren’t sure who you can name as a beneficiary to your life insurance policy, our insurance experts at Insurance Specialists, Inc. can provide the support you need. Learn more about how we can help you by reaching out to us today!
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