Who Can Be A Life Insurance Beneficiary?
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3 responses to “Who Can Be A Life Insurance Beneficiary?”
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The number one rule to keep in mind with naming a beneficiary is that there must be an insurable interest. In other words, the person, group or business would suffer a financial hardship at your death. Common beneficiaries include a spouse, children, life partner or ailing parent. In business, a beneficiary may be a company in a key man situation or a buy sell agreement in a partnership. You may also name a favorite charity or cause as a beneficiary under most circumstances.If an insurable interest is not named at point of application with most insurance carriers, they will decline to underwrite the application.
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The owner of a life insurance policy designates the beneficiary. The owner and person insured is not necessarily the same person. The beneficiary can be changed by the owner whenever he or she wishes. The owner of an existing policy is not required to establish a relationship with himself and the insured, nor with himself and the beneficiary.
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Anyone who has an insurable interest can be a beneficiary. For example, your spouse, child even grandparents. Brothers and sisters. A loan as a collateral assignment if necessary. It could be a business who depends on your activity to support the business or a business owner. Your Estate and Charities can be beneficiaries.
Your neighbors cannot. People who do not have anything to lose from your death generally cannot such as strangers.
This is a simple approach to your question. If you have someone specifically you are thinking about, contact your agent/broker. Feel free to reach out to the agents on this forum as well.
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