I’m trying to figure out who to make my life insurance beneficiary. Is it better to go with family, or should I pick someone else? I’m single, so not sure who to choose. Anyone else gone through this?
You can pretty much pick anyone as your beneficiary, even a friend or your parents. If you don’t have kids, I think parents are a good option. Just make sure you put your policy in trust.
Ren said:
You can pretty much pick anyone as your beneficiary, even a friend or your parents. If you don’t have kids, I think parents are a good option. Just make sure you put your policy in trust.
Good point! I hadn’t thought about using a trust. Is that something I need to set up with the insurance company?
@Zev
Yeah, you’d set it up with them when you write the policy. It keeps things smoother for your beneficiaries and can help avoid inheritance tax too.
If you don’t name a beneficiary, it goes to your estate. So, if you want someone specific to get the money, def name a beneficiary.
Dallas said:
If you don’t name a beneficiary, it goes to your estate. So, if you want someone specific to get the money, def name a beneficiary.
Got it. If I don’t pick anyone, does that mean the payout might get split between relatives?
@Zev
Exactly. If it goes to your estate, it’ll follow the intestacy rules, which means close family members like spouses or civil partners would get it first.
You can also name multiple beneficiaries, like your parents and a sibling, or split the payout however you want. Just make sure you set that up properly in the trust.
Brady said:
You can also name multiple beneficiaries, like your parents and a sibling, or split the payout however you want. Just make sure you set that up properly in the trust.
Interesting. So I could have it split between my parents and a charity too, right?
@Zev
Yeah, totally! You just have to make sure it’s clearly written down so everyone knows how it’s divided.
I’ve got my kids as beneficiaries, but since they’re under 18, the money will be held until they’re old enough. Keep that in mind if you choose younger people.
Jensen said:
I’ve got my kids as beneficiaries, but since they’re under 18, the money will be held until they’re old enough. Keep that in mind if you choose younger people.
Oh, good to know. So the money stays in the trust until they’re 18, right?
@Zev
Exactly! They can’t get it directly until they hit 18, but the trustees can use it for their needs in the meantime, like school fees or living expenses.
If your beneficiary is based in another country, make sure they have a UK bank account, or the executor will need to handle transferring the money. It’s doable but can be a bit tricky.
Zen said:
If your beneficiary is based in another country, make sure they have a UK bank account, or the executor will need to handle transferring the money. It’s doable but can be a bit tricky.
Oh, that’s a good tip. I was thinking about naming my sibling abroad.
@Zev
Yeah, it’s possible. Just make sure the trustees or executor are prepared to manage that part!