Wednesday, October 2, 2013

One Critical Decision In Life Insurance Policy

It's important to start shopping around for life insurance quotes so you can fully protect your loved ones. Congratulations! Unlike many Americans, you're on the right track. Even though life insurance rates are very affordable these days, roughly 30 percent of people in the US don't have any coverage.

While you're headed in the right direction, you should know that there is one more key decision you have to make before you will truly be ready to compare life insurance quotes from the top providers. You're going to have to pick a beneficiary. Depending on your circumstances, this may be an obvious and simple choice. Not all of us are that lucky.

There are several options, and some are definitely better than others. Let's go deeper into discussing each one so you can make the best choice for your unique situation.


Your Spouse

This is the logical choice for most people. You probably already trust your spouse in many other financial matters, so it's natural to think of them first when it comes time to decide who should control your life policy payout. There is one important thing to remember though. Should you ever decide to divorce your spouse, you will need to keep your policy up to date.

Your Children

Many people might instinctively think that their children are the ideal option when it comes time to pick a beneficiary. However, if your children are still minors, this could be a bad choice. Anyone under the age of 18 is not legally going to be able to make some of the financial decisions that fall on a beneficiary. If an insurance policy is paid out to a minor, a judge will step in to administer the proceedings. This can delay the process at a time when your child may be in dire need of the money.

A Trustee

Because of the shortcomings of the first two options, many people decide to turn to a third party. By creating a family trust and putting a trustee in charge, you can create a mechanism that ensures the payout process will be handled legally and efficiently in the event of your death. Depending on your policy, you may not have to alter things due to a divorce from your spouse. You also won't have to worry about a judge stepping in to delay things. The most important part of choosing a trustee is finding a professional who you are certain you can trust. You should look around online or ask your friends for recommendations before you appoint anyone.

Once You've Decided

When you're confident you've made the right choice for your situation, it's time to start shopping around to get the best deal. By choosing the right beneficiary and taking time to compare life insurance quotes from multiple companies, you are giving yourself a high probability of coming out on top. Don't be one of the millions of Americans who either has no coverage, has selected the wrong beneficiary.

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