Taking out life cover is the first step to ensuring that your loved ones have a financial safety net. But being able to gain the most out of your policy means reviewing it periodically to see if anything there needs to be updated or changed. Adding or removing beneficiaries is crucial to keeping your policy updated and here is how you can do it.
Who are you beneficiaries?
Your beneficiaries are people who you select to receive your life insurance payout. It could be any of your loved ones ranging from your family members, your spouse, or a friend. There are some cases in which people who do not have any dependents or relatives choose to have their payout donated towards a charity of their choice.
How can you add a beneficiary?
Insurers have made life cover flexible for policyholders to update their beneficiaries. What this means is that you will be able to update, add, or remove people who you would like to add to your policy while your cover is still active. However, the policyholder (the person who has taken out the cover) is the only person who can make these changes.
How do you know that it will be paid to the right people?
We all want to rest easy knowing that our assets and life cover payout ends up in the right hands, instead of you know who. So, how do you know that your insurer will do right by you?
Firstly, you will have to make sure that your beneficiary list is updated to make sure that your insurer hands over your claim payout to the right people. Secondly, consider having a will legally drafted to avoid family members fighting over your assets.
The added benefit that comes with a will means you will have an executor who will ensure that what you have stated in your will is carried out. You can forget about turning in your grave from stress.
Make the call
The best time to update your beneficiary list is when you are about to go through major life changes such as getting married, being the bread winner, buying a house or having children.
Always remember to contact your insurer to discuss the prospects of adding a beneficiary and if there will be any financial implications that come with adding a beneficiary.