How To Choose Your Life Insurance Beneficiaries

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Choosing the beneficiaries for your life insurance policies is an important decision as it will impact the people around you who will be affected financially by your absence. 

We will start by defining exactly what the term “beneficiary” means and then provide a list of possible beneficiary options and some advice to help make this critical decision. 

Definition: Beneficiary

As it relates to life insurance, a beneficiary is an individual or entity chosen by the policyholder to receive the proceeds from their policy upon the policyholder’s death.

Who Can I Nominate As A Beneficiary?

You can choose anyone as a beneficiary in a life insurance policy, offering flexibility in customising your financial objectives. Here are some examples:

Individuals

  • Your spouse or partner
  • Children, including biological, adopted or stepchildren
  • Parents, siblings and other family members.
  • Close friends or other significant people in your life

Multiple Individuals

  • Multiple beneficiaries can be listed, for example, by dividing the benefit among your children.

Trust

  • Nominating a trust as the beneficiary allows for more structured management and distribution of the proceeds.

Estate

  • Naming your estate as the beneficiary means the proceeds become part of your overall estate and will be distributed according to what you have stipulated in your will.

Charity

  • You can contribute to causes you care about by choosing a charitable organisation as a beneficiary.

Legal Entity

  • Your company or business partners can be named as beneficiaries.

Top Advice To Help You Choose Your Life Insurance Beneficiaries

Take time to analyse who you must assist or protect when you are no longer around and who would best carry out your financial objectives in your absence. Use these points to guide you:

  • Prioritise your financial dependents (usually spouse, partner, children).
  • Where appropriate, nominate more than one beneficiary.
  • Avoid naming minors as beneficiaries; instead, name someone who will protect their best interests.
  • Align the beneficiary policies with the wishes in your will.
  • Be clear and specific with your intentions.
  • Check and update your beneficiaries regularly, especially when things in your life change.

Contact Workerslife today to learn more about our affordable life policies and top advice to help choose your life insurance beneficiaries.