When you purchase a life insurance policy you must designate one or more beneficiaries, often a primary and a secondary who will receive the proceeds upon your death. Selecting a beneficiary isn’t always as obvious as you might think. To help make the process a little easier, we offer these tips:

1. Consider the purpose of the policy. Start by asking why you are buying the policy. Is it to protect your spouse and children, provide care for a disabled sibling after you’re gone or leave a legacy gift to a charity? Whatever you decide, this is a great place to start.
2. Be Specific. General statements such as “my spouse”, “my children” or “my business partners” can lead to confusion, litigation and the life insurance funds going into your general estate even though this was not what you wanted. Instead, be specific and use the names of the people you want to receive the funds to avoid confusion.
3. Understand your options. There are many options for beneficiaries and you should review each carefully. Generally, you can designate one or more of the following as a beneficiary:
   • One person
   • Two or more people along with your statement as to how you want the funds dispersed between them
   • A trustee of a trust you’ve already established
   • A non-profit charity
   • Your estate.
4. Select a secondary beneficiary. You are often required to have both a primary beneficiary and a secondary beneficiary. The “primary” is the person you want to have the funds, and the “secondary” beneficiary receives the funds if the primary is not alive at the time of your death. Use the same criteria when selecting the primary beneficiary as you used for the secondary one.
5. Keep the beneficiary designates up to date. Review the policy on a regular basis to assure that the beneficiaries are still the ones you want to receive the funds and to address any changes. For example, if you name “my children” as beneficiaries and one has died, do you want the policy funds to be dispersed among your remaining children or do you want the deceased child’s portion to go to their family? This is also the time to address changes due to divorce, business status or other life events that have changed your circumstances.
6. Don’t designate a minor as a beneficiary. State regulations limit if or how much a minor child can receive from life insurance proceeds. If you die with a minor as beneficiary the court may need to appoint a guardian. This is a lengthy process and you can avoid it by establishing a trust or designating an adult you trust to oversee the distribution of funds to the minor child.
7. Be consistent with your will. To make sure that your wishes are honored, check that your beneficiary designation is consistent with the terms of your will. Often boilerplate language in a will designates beneficiaries to receive life insurance proceeds and it must be consistent with the policy itself to avoid confusion and litigation.

Purchasing a life insurance policy is an excellent way to protect your loved ones after you are gone. At Alliance, we can help you select the best policy that meets your needs at a price you can afford. Our expert agents can also help you evaluate your beneficiary options to assure that you are protecting those you love in the best way possible. Contact us to receive a quote or speak with one of or agents today.