Beneficiaries Explained: Why It’s Important to Review Them Regularly
When setting up a life insurance policy, one of the most important steps is choosing your beneficiaries—the people or organizations who will receive the benefits of your policy. While this decision may seem straightforward, it’s not something you should simply set and forget. Life changes, and so should your beneficiary designations.
What is a Beneficiary?
A beneficiary is the person (or group of people) you designate to receive your life insurance proceeds. You may choose a spouse, children, other family members, or even a charitable organization. You can also name multiple beneficiaries and decide how benefits should be divided among them.
Because this designation overrides what’s written in a will, it’s one of the most direct and impactful choices you make when creating your policy.
Why Reviewing Beneficiaries Matters
Life doesn’t stand still, and your life insurance should reflect that. Reviewing your beneficiaries regularly ensures your coverage matches your current wishes and life circumstances. Here are a few common situations where updates may be needed:
Marriage or divorce: Significant life changes can affect who you want to receive benefits.
New children or grandchildren: Expanding your family often means expanding your coverage and updating beneficiaries.
Loss of a loved one: If a designated beneficiary passes away, you’ll want to adjust your policy accordingly.
Changing priorities: Over time, you may want to add a charitable organization, trust, or other family member as a beneficiary.
Failing to review and update beneficiaries can result in outdated or unintended distributions, leaving loved ones without the protection you intended.
The Role of a Retirement Planner
Working with a retirement planner can help you keep your policy in line with your overall retirement and estate goals. Regular reviews ensure that your life insurance benefits go exactly where you want them to, without confusion or conflict.
The Bottom Line
Beneficiaries are more than just a name on a policy—they’re a reflection of the legacy you want to leave behind. Regularly reviewing and updating them ensures your life insurance continues to protect the people and causes that matter most.
Talk with a retirement planner today to review your beneficiary designations and make sure your policy reflects your current wishes.
