Tips for Choosing A Beneficiary For Your Life Insurance Plan

by Anil Kumar ~ July 4th 2018

Life insurance plans are known for providing a lump sum amount to the loved ones when with insurance provider passes away. This accumulated amount is known as the death benefit and greatly help the loved ones to take care of funeral costs, pending financial responsibilities as well as other essential expenses. The loved one to receive this death benefit is known as the beneficiary, as named by the insurance buyer. Usually, an insurance buyer has to name a family member as the beneficiary whom they want to receive the accumulated amount. However, choosing a beneficiary may not be easy for everyone and hence we are here to help you with the same. In this blog, you will get an idea of who should be your beneficiary in some specific situations.

When You Are Single

Everyone is single once in their lifetime and most of them buy an insurance plan during their bachelor life. When you are single, your parents and siblings are your family and you usually don’t have much liabilities upon you. under such conditions, your parents are considered your caretakers and hence are a preferred choice for the being the beneficiary. If you are also single, you are suggested to name your parents as the nominee until you get married. You can always change your beneficiary in the existing insurance plan after each major life changes.

When You Are A Single Parent

Now, this is a bit different situation than the above mentioned one still there are people didn’t marry and have adopted a child or had a child from their partner and they decided later not to marry. Those parents are also considered as single parents who get divorced and have to take care of their kids alone. The kids of such parents mean everything to them and they are a default choice for being chosen as the beneficiary. If you too are a single parent, you would also wish your child to receive all the financial benefits that may help them continue living a normal life in your absence.

When You Are Married But No Kids

Almost everyone on this earth gets married and there is a duration the wedding and having kids. If you have been recently married and planning to buy a cheap life insurance plan, you must be wondering who should be the beneficiary. Under such situations, you are supposed to name your spouse as the beneficiary as they will be the one to suffer the most. You would also not like to see your partner struggling with financial commitments in your absence and hence it’s a default choice to name your partner as the nominee of your insurance plan.

When You Are Married With Kids

Once you get married and have kids, they become your family and hence life as well. You would like to do every possible thing to make their life easier and more comfortable. And the benefits of an insurance plan is no exception to them. This is pretty normal that you would like to name your spouse and kids as the nominee or the beneficiary of your plan. This will provide them an accumulated death benefit whenever you pass away and they can utilize the amount to take care of funeral expenses, pending debts as well as other essential expenses.

When You Have More Than One Obligations

There are situations when many people in the family are dependent on you and you cannot ignore any of them. You have to take care of them as well as their daily living expenses. hence, when you buy an insurance plan, you should consider that there will be more than one beneficiary to receive the insurance benefits. Also, as the number of beneficiary increases, the amount for each beneficiary decreases and hence a small coverage amount may not be sufficient to help everyone in the family. You can name every dependent in the family as your beneficiary, but you are suggested to buy a plan with a much bigger coverage for the same.

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