Did you just start a new job or did you recently purchase private life insurance? If so, you probably came across the term “beneficiary” as you filled out this information. This is the person or people who will receive the funds from your policy when you pass away. For most people, there will be a primary beneficiary and contingent beneficiary.
The primary is the person who will receive most or all of the funds. You can choose who you want this person to be. In some policies, you can even use this strategy to help with business planning or replacing a key employee.
Most people, however, own a private policy or one through work that names their spouse or other family member as the primary beneficiary. The secondary beneficiary is the person who will receive the remaining amount of the policy after the primary beneficiary has been paid. The purpose for naming a second person is to allow you to maximize the benefits handled through this process and to support more people when you pass away, but also to ensure that someone receives your policy benefits if the primary beneficiary passes away before you do.
It’s important to do an annual review of your life insurance policy to make sure that you’ve covered all your bases and that you have an up-to-date beneficiary listing.
Are you ready to talk about how your NJ life insurance policy can help you accomplish your estate planning goals and what other aspects you need to consider? This is a good reminder to meet with an NJ estate planning lawyer to discuss life insurance and other important aspects of your planning.
Don’t head into 2022 without thinking about a review of your life insurance policies and their associated beneficiaries. If you need more support in crafting your estate plan, reach out today for more information.