Who can and cannot benefit from my life insurance policy?

Life insurance is one of the most potent assets for many Denver, CO residents. It is an excellent way to cushion your family and loved ones from the harsh financial reality when you are gone. 

However, many life insurance buyers face the challenge of choosing and naming their beneficiaries. Do you just pick any name on your list? Who can and cannot benefit from your life insurance policy? Alliance General Insurance Agency will take you through the process of naming your beneficiary. Read on to find out.

Who is a beneficiary?

When you decide to buy life insurance, your insurance provider will ask you to name a beneficiary. The people or person you appoint will be the beneficiaries of your life insurance policy. Your beneficiaries will inherit the money in a lump sum from your insurance company upon your demise.

Who can be my beneficiary

The answer to that question is ‘anyone.’ There are no specific criteria for choosing a beneficiary, as this is always a personal choice. Who you wish to be your beneficiary can be a total stranger to you or your family. It does not need to be your spouse, children, or parents; it can be anyone. Who you choose is entirely up to you.

How should I choose my beneficiary?

This is the most challenging part of any life insurance policy buyer. Many people admit to having the pressure to name their families. When choosing a beneficiary consider the following:

  • Who do you think should benefit from your money the most?
  • Do you know anyone in financial need?
  • How many beneficiaries do you have?

It is essential not to be in a hurry when signing your life insurance contract. Choosing a beneficiary is a big financial decision that can impact your loved ones massively. At Alliance General Insurance Agency, we recommend seeking guidance from a qualified insurance expert in Denver, CO.