At&T Life Insurance Beneficiary

Have you been thinking about purchasing a life insurance policy? One of the things you'll need to consider when choosing a policy is selecting a beneficiary - or beneficiaries - who will receive the benefits upon your passing. But what exactly does that mean, and how do you choose the best beneficiary for you? Keep reading to learn everything you need to know about life insurance beneficiary designations.

What is a life insurance beneficiary?

Simply put, a life insurance beneficiary is the person - or people - who will receive the benefits of your life insurance policy when you pass away. Depending on the policy, you may name one primary beneficiary or multiple beneficiaries who will share the benefits.

Primary vs. contingent beneficiaries

When selecting your beneficiaries, it's important to consider both primary and contingent beneficiaries. Your primary beneficiary is the person who will receive the benefits of your policy if they are still alive when you pass away. However, if they've already passed away or are unable to be located, your benefits will go to your contingent beneficiary.

Some policies allow you to name multiple primary beneficiaries, as well as contingent beneficiaries. Consider naming more than one person in case your primary beneficiary predeceases you or is unable to be located.

Choosing your beneficiary

Choosing a beneficiary is a personal decision that requires careful consideration. Here are a few things to keep in mind when making your selection:

Relationships

Typically, people choose their spouse or partner as their primary beneficiary. However, you can also choose a child, relative, or close friend. Consider choosing a beneficiary who is financially responsible, trustworthy, and who you believe will use the benefits in the way you intended.

Age

If you're choosing a child or grandchild as your beneficiary, consider their age. Some policies require that a minor's guardian be appointed to manage funds until they come of age. Make sure to think about this when selecting your beneficiary.

Tax implications

The benefits of a life insurance policy are typically not taxable for the beneficiary. However, if you name your estate as the beneficiary, the benefits may be subject to estate taxes. Talk to your financial planner or accountant to understand the tax implications of your beneficiary selection.

Contingent beneficiaries

As mentioned earlier, a contingent beneficiary is the person who will receive the benefits of your policy if your primary beneficiary predeceases you or is unable to be located. Here are a few things to keep in mind when selecting your contingent beneficiary:

Order of hierarchy

If you choose multiple contingent beneficiaries, make sure to prioritize them in the order you want them to receive the benefits. For example, if your primary beneficiary is your spouse and your contingent beneficiary is your child, consider what would happen if your spouse passed away before you.

Relationships

When selecting your contingent beneficiary, consider their relationship to you and your primary beneficiary. Many people choose a child as their contingent beneficiary, but if your primary beneficiary is your spouse, you may want to consider choosing a sibling or other relative as your contingent beneficiary.

No beneficiary named?

If you don't name a beneficiary on your life insurance policy, the benefits may be distributed according to your will or, if you don't have a will, by state law. It's important to make sure you have a beneficiary selected to ensure the benefits go to the person or people you want to receive them.

Conclusion

Choosing a life insurance beneficiary is an important decision that requires careful thought and consideration. Keep in mind your relationships, the age of your beneficiaries, the tax implications, and the contingency plan. Finally, make sure to talk to your financial planner or accountant to ensure you're making the best decision for your unique situation.

Contingent Beneficiary: How to Choose for Life Insurance

In addition to selecting a primary beneficiary, choosing a contingent beneficiary is an important step when purchasing a life insurance policy. Here are some things to keep in mind when selecting your contingent beneficiary:

Think about order of hierarchy

Just like with your primary beneficiary, consider the order in which your contingent beneficiaries will receive the benefits. For example, if your spouse is your primary beneficiary and your child is your contingent beneficiary, consider what would happen if your spouse passed away before you.

Consider relationships

As with the primary beneficiary, make sure to consider the relationship you have with your contingent beneficiary. Many people choose a child or other close relative, but consider who would be best suited to handle the funds in case of your passing.

Include all the necessary information

When listing a contingent beneficiary, make sure to include their full name, address, phone number, and relationship to you. This will ensure that the benefits are distributed to the correct person.

Conclusion

Choosing a contingent beneficiary is an important step when purchasing a life insurance policy. Consider the order of hierarchy, relationships, and including all necessary information to ensure that the benefits go to the correct person. With careful planning, you can ensure that your loved ones are taken care of in case of your passing.

Final Thoughts

Choosing a beneficiary for your life insurance policy is an important decision that can have long-lasting effects on your loved ones. By carefully considering your relationships, contingent plans, and other factors, you can ensure that your beneficiaries are taken care of in case of your unexpected passing. Talk to a financial planner or accountant to understand the tax implications of your beneficiary selection. Don't forget to review your beneficiary selection regularly to make sure it still reflects your wishes and changing family circumstances.

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