Deciding who should receive the death benefit from your life insurance policy is not an easy decision.
Often times, individuals name their spouse and/or children which is not always a wise decision.
Choosing the wrong beneficiary can cause division in a family and leave loved ones heartbroken.
The following are a few key life insurance beneficiary mistakes to avoid.

• Assuming your will takes precedence over the policy

Regardless of what your will says, the benefits of your life insurance policy will be paid to the beneficiary listed on the policy.
That is why you should schedule regular policy reviews with your agent in order to make sure that your policy benefits will go where you want them to upon your passing.

• Neglecting specific details

Whenever you name a beneficiary, you want to be sure to include the individual(s) full name, social security number and physical address.
Failing to include this information may cause a delay in disbursing the death benefits as there is the possibility of not being able to locate the individual.

• Naming a minor child

Life insurance companies do not pay proceeds directly to minors.
Instead of naming a minor as beneficiary, it is a wise decision to create a trust and have an adult manage the money until the minor reaches adulthood.
You may also consider leaving the money for the minor to a reliable adult.
Consult an attorney to determine the best course for your particular situation.

• Not naming contingent beneficiaries

When naming their beneficiary on a life insurance policy, most people will name their spouse not taking into consideration that there is the possibility that the two of them may have something unfortunate happen to them together.
It is highly recommended that individuals name secondary (or contingent) beneficiaries.
If the primary beneficiary dies before you do, then the money passes to the secondary beneficiary.
If both the primary and secondary beneficiary dies before you do, then the life insurance proceeds typically go into the estate and are subject to probate.

• Failing to share policy details with beneficiaries

The most important thing is to let your beneficiaries know that the policy exists, where it can be found in the event of your death and the name and contact information of the agent or company in which you purchased the policy.
Open communication now with beneficiaries can save a lot of confusion later.
By Rodney Jefferson, InsuringAmericaOnline.
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