Who Gets The Life Insurance Money?
You fell in love, got married, and decided to purchase life insurance. Unfortunately, like 40-50% of Americans, your marriage ended in divorce. You swear you’ll never get married again, until you do. The years fly by and one unfortunate night, in your late fifties, you pass away unexpectedly. Who gets the money?
Most people will believe their current wife will inherit the death benefit, however if the policy owner failed to change the beneficiary the money belongs to the first wife. Providing your first wife was the original beneficiary.
I find it astounding that people will spend most of their life working for money, but will not invest an hour here and there to understand ways to maximize their money. As a life insurance agent, it is especially frustrating since I understand the true value of life insurance; and must always overcome a “set it and forget it mentality.” That is simply not the case.
Your life insurance, like an investment portfolio, should be reviewed at least biannually. The reason being that change is constant, relationships end, or you may no longer wish to leave a large sum of money behind to your original beneficiary.
There are several reasons why a person may want to change their beneficiary throughout their lives, however life insurance companies do not simply assume that change on your behalf. If you change spouses, have additional children, or lose your original beneficiary to death it is very important for you to update your life insurance policy.
Life insurance is a contract. Unless the contract is altered by the owner and the changes acknowledged by the insurance company, it will remain in force with its original intent. As your life and relationships change, don’t forget to change your beneficiaries.
Personal Insurance Advisor
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