The beneficiary portion of your life insurance policy is where you add the people who matter most to you financially when you are not around to care for them. Policyholders rarely discuss beneficiaries because they believe they can add whoever they want. The team at Ruddy Insurance Group wants you to take extra precautions regarding your beneficiary selections.

Are there limits on adding beneficiaries to your life insurance policy?

There are limitations on who you can include as a beneficiary. Animals are ineligible as beneficiaries because the law states that only a person or an asset qualifies as a beneficiary. Children underage at the time of your passing are ineligible, as they are not of age to claim it. A trust asset or guardian to protect funds for minors and animals could suffice if the carrier approves. Otherwise, the carrier will withhold a minor’s funds until eighteen and pass the animal’s funds to the policyholder’s estate.

Could qualified beneficiaries end up ineligible for life insurance death benefits?

A beneficiary can end up ineligible if said beneficiary caused the policyholder’s death. It’s called the slayer rule, and in Niles, OH, murder, aggravated murder, and voluntary manslaughter bar a beneficiary from receiving the policyholder’s death benefits. A beneficiary who passed away is ineligible for death benefits. Death benefits go to the estate if the beneficiary is unidentifiable or the charity or organization beneficiary is no longer in operation. However, a mentally ill beneficiary who cannot manage funds can still receive them if they have a guardian to help.

It’s important to choose the right beneficiaries; life insurance may overrule a will or trust in Niles, OH. The team at Ruddy Insurance Group will confirm that the people, assets, and charitable organizations you name meet state requirements. We encourage you to keep your policy updated with the people you wish to care for after death to avoid headaches for your loved ones. Contact us for more information.