You should update your life insurance beneficiary whenever a major life event changes who you want to receive your death benefit. Life insurance payouts go to the person named on the policy—not the person named in your will. An outdated beneficiary designation can send hundreds of thousands of dollars to an ex-spouse, a deceased relative's estate, or someone you no longer intend to benefit.
Contact your insurance company or agent and request a beneficiary change form. Fill it out with the new beneficiary's full legal name, date of birth, Social Security number, and relationship to you. Submit the form and confirm with the insurer that the change has been recorded. Keep a copy for your records.
The most common mistake is simply forgetting. People set up a policy, name a beneficiary, and never revisit it—even after a divorce or new child. Another mistake is naming minor children directly. Without a trust or custodial arrangement, the insurer cannot pay a minor, and a court may need to appoint a guardian of the estate, which creates delays and costs.
Review your beneficiary designations at least once a year and after every major life event. A Truscott policy checkup includes a beneficiary review as a standard part of the process. Contact us to make sure your life insurance benefit goes exactly where you want it to go.
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