Everyone should have a life insurance policy in place to cover expenses following their passing. As an important part of estate planning, you’ll need to designate at least one beneficiary who will become responsible for these assets. Here’s what you should think about when selecting this individual.

What Should You Consider When Naming a Beneficiary?

1. A Beneficiary Can Be Almost Anyone

When estate planning, you can choose an individual to be the beneficiary of your life insurance plan, such as a spouse or child. It’s also possible to name multiple people as your beneficiaries, in which case the benefits will be divided into percentages. In some cases, people name charitable organizations as beneficiaries for their wills and estates. Primary beneficiaries are the first to receive the benefits, but contingent beneficiaries should be named in the event the primary beneficiary dies first. 

2. You Must Choose Between Revocable & Irrevocable

An irrevocable life insurance beneficiary cannot be changed unless the beneficiary approves it. This makes it extremely important to be certain of your choice in such cases. However, the arrangement is useful if you need to guarantee benefits for a specific individual, such as a child. Revocable life insurance beneficiaries, on the other hand, can be changed as needed, which is useful if you’d like the freedom to change beneficiaries based on evolving circumstances.

3. Your Benefits Should Promote Financial Security

While naming a beneficiary for insurance plans, wills, and estates can be challenging, it’s helpful to consider why you have these safeguards in the first place. Usually, it’s to ensure the financial security of dependents or other surviving family members. Consider who relies on you financially, and who would face challenges to pay bills without your contributions. You’ll also want to consider how funeral expenses will be covered, as these costs can increase, and having insurance in place can take care of the matter in advance.

Naming beneficiaries for wills and estates is critical, as failing to do so could prevent your final wishes from being fulfilled. Without these measures in place, your benefits or assets could wind up in the wrong hands. Fortunately, Luke A. Weiland, Attorney at Law of Wisconsin Rapids, WI, can help you navigate the estate planning process to ensure your assets are distributed as you see fit. Explore the attorney’s full list of services online or call (715) 422-6808 to set up a consultation.