You can support your loved ones after you pass away by creating a life insurance policy. This type of coverage provides payouts to the policyholder’s loved ones after the insured person’s death. Use the following guide to pick the beneficiaries for your policy.

Different Types of Beneficiaries

Primary beneficiaries are the first to receive the payout. Most people select their closest family members for this, such as spouses, partners, and children.

Contingent, or secondary, beneficiaries only receive benefits if the primary beneficiaries have passed away. You may select friends or members of your extended family for this role.

There’s also a distinction between revocable and irrevocable beneficiaries. You can change a revocable policy at any time, but can’t remove irrevocable beneficiaries after the policy goes into effect unless they consent.

Selecting Multiple Loved Ones

You can choose multiple people to split the payout. For example, you could leave half of the money to your spouse and the rest to your daughter. You could also leave a percentage to your current significant other and the rest to your former spouse.

If you have no dependents, you could split the funds among your siblings or best friends, then change these revocable designations when you have children.

What to Consider When Choosing Beneficiaries

Keep age in mind when you select loved ones for the policy. If you’re a single parent and not in a relationship, you can’t make a young child your sole beneficiary because minors are not permitted to manage their own money. In this situation, name their new guardian in the policy, or choose a conservator to manage the funds until your child turns 18.

If your loved one receives disability benefits, set up a trust. This way, a payout won’t affect their eligibility for need-based financial aid.

If you’re interested in getting life insurance, reach out to Ron Nall Agency of Andalusia, AL. This trusted agency matches people with policies that best meet their needs. They also help families file claims when the time arises and alter policies as needs change. Visit their website to learn more about life insurance, or call (334) 222-3106 to discuss your requirements.