The reason why most people take out life insurance is to ensure that they protect their dependant’s financial future. Here is what you need to when it comes to knowing if your life insurance covers dependants who are under 18 years old.
You can list dependants under 18 years old as beneficiaries
Life insurance comes with the flexibility of insuring those who matter to you. It is also created to adapt with each life stage you enter to make sure that you and your loved ones are adequately covered. You will be able to list dependents that are below 18 years of age. No matter what age your dependents may be at, you can still list them as a beneficiary. You can always add or remove beneficiaries as you progress in life to keep it up to date.
What will happen to the life insurance payout?
When you take out a policy and list your beneficiaries your insurer will make sure that the payout is paid to the people you have listed, which is why it is important to keep your listed beneficiaries up to date to ensure that it goes to the right people. Even if they are under 18 years old.
Having a will in place
When you have children who are still minors, having a will is something to consider to protect them along with your assets. A will is a legally recognised document that gives you the power to decide how you want your assets and investments to be used. It can also help you leave your life insurance payout to a trusted guardian or an executor who will be able to give your children the payout once they have reached a certain age. You can choose at what age you would like your children to receive the payout in your will.
Setting up a Guardian’s Fund
A Guardian’s Fund is a trust that falls under the administration of the Master of the High Court. It is designed to protect funds that are intended for minors or untraceable heirs that are intended to inherit your assets and investments. One of the benefits of placing your funds in a Guardian’s Fund is that it is invested with the Public Investment Corporation and can gain interest on a monthly basis which is determined by the annual rate that has been determined by the Minister of Finance. However, it is important to put research into setting up a Guardian’s Fund or a trust as both can have their drawbacks which can make claiming the money from each complicated.