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What is the purpose of a beneficiary?

 

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When naming your beneficiary, you will be deciding who receives the assets of your life insurance in the time of your death. At the time you are deciding on a beneficiary, it is vital to analyze the legal significance of your decision.

 

If your beneficiary is your estate, the life insurance will be connected with your estate and is dispensed in accordance with the conditions of your Will. The proceeds of the insurance will not be given until the Will is processed by the courts and taken through estate taxes. If you do not name a beneficiary, your estate is your default beneficiary. If you decide on your spouse, relatives, friends, or charitable organizations as the beneficiary, the insurance assets will be given directly to named beneficiary if they are the legal age.

 

If your chosen beneficiary is below the legal age or 18 in the time of your death, all benefits are to be held until the beneficiary is of legal age. The money, and acquired interest, is to be paid when the named beneficiary reaches 18 years of age.

 

To bypass any additional administration fees for this services, and to make sure that the money is available in a reasonable time, you may want to think about naming a trustee for the assets. It is strongly recommended to possibly choose a contingent beneficiary. This person will accept the insurance benefits, should your chosen beneficiary dies before you, or dies at the same time.

 

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