Should you inform your beneficiaries about your life insurance policy? And how much information should you share regarding your policy? If these are some of the questions that have left you scratching your head, here is what you need to know.
Listing beneficiaries is the first step
All insurers are required to ask you to list a beneficiary on your life insurance policy. This is someone who you would like to receive the payout from your policy once you have passed on. Even if you do not have someone in mind, it is possible to list a charity as a beneficiary. There is no need to stress if you do not have someone in mind while taking out the policy as you can always go back and add them at a later stage.
However, not informing your beneficiaries can result in the payout remaining unclaimed. The latest research has revealed that there has been R17.1 billion that has remained unclaimed in unit trusts and policies.
What to tell your beneficiaries
Taking out life cover and adding beneficiaries is the first step. The next thing to do is inform them. Letting your beneficiaries know that you have a life cover with an insurer can make the claim process easier for them. For example, placing a claim at MiWayLife can be done online or over the phone.
This process differs from insurer to insurer which is why your beneficiaries must know how this process works. You can also opt to tell them where you have placed all relevant information regarding your policy. This should preferably be kept in a physical or online file to keep all relevant information in one place.
What if you are not comfortable informing your beneficiaries?
There are many reasons why someone may feel uncomfortable telling their beneficiaries that they have life cover worth hundreds of thousands or millions of Rands. Telling a trusted friend or family member is one of the options. You also have the option of creating a legally recognised will that will ensure that the right people receive the payout from your policy. The last thing that you want is seeing your hard work going unclaimed because your loved ones were unaware of it.