The need for protection is the first reason to hire a life policy. Especially, when what we want to protect is the family and the people we love the most (the beneficiary). There comes a time when a life policy is essential to live peacefully, even when you are away or if you are unable to work and your family income is at risk. With a life policy you ensure financial support.
Having a policy that guarantees sufficient insured capital is a source of peace of mind.
When buying life insurance, one of the most important details to consider is the designation of the most relevant figure: the beneficiary or beneficiaries, in this article we will talk about it. Take note!
What is the beneficiary?
The beneficiary is an individual or entity that will receive all or part of the proceeds from that account in the event of a loss or incapacity of the holder. One or more individuals can be named or designated as beneficiaries depending on the financial instruments available.
The selection of the beneficiary is a highly personal decision that must be made based on values and financial circumstances.
Anyone can have the status of beneficiary of life insurance, since it is the insured who designates him, regardless of whether he has a family relationship or not.
When purchasing life insurance, we can include as beneficiaries our spouses, children, parents or any other person who is financially dependent on us and who we want to protect.
The beneficiary named by us, may have the money to cover expenses such as: studies, payment of bills, food, release of credits, among others.
Therein lies the importance of choosing the beneficiaries, selecting it provides a relatively easy way to transfer an insurance policy after an event. However, if you're not careful, missing or outdated beneficiary designations can cause your estate plan to fail.
When is the life insurance beneficiary established?
The designation of the beneficiaries can be made at the time of contracting, including their names in the conditions of the policy as the persons who have the right to receive the insured capital in the event of the death of the insured person.
However, life takes many turns and the personal circumstances of the insured or the persons designated as beneficiaries of the policy may change, it is possible to modify the beneficiaries of the life insurance later, through a writing that the policy holder you must present to the insurance company. With this writing, the contract would be updated.
It is important to note that these types of changes can be made as many times as necessary. In addition, the holder can cancel the designation of a beneficiary at any time.
Other options to consider
There is also other life insurance available to us that is made to solve an important issue in the event of death, such as a mortgage on a main home.
In these cases, the indemnity is intended to cover such mortgage, giving way to the "release" of the costs and debt to the relatives of the deceased.
BMI has great options that adapt to your needs, just make a personalized consultation.
