The American Institute of Certified Public Accountants defines a beneficiary as the person or entity you name to receive the death benefits of a life insurance policy. Depending on which state you live in there are certain rules you must consider before naming your beneficiary(ies). Information on Indiana insurance laws can be found here.
Naming your beneficiary occurs at the time you apply for life insurance. There are no restrictions on the number of beneficiaries you can designate, but you will have to decide how much each beneficiary will receive. You can also designate your beneficiary as revocable or irrevocable. Revocable beneficiaries can be changed at any time, but once a beneficiary is deemed irrevocable that status cannot be changed without his or her consent.
Those of you who have already set up a life insurance policy will want to revisit it every so often especially when certain life events happen like divorce, remarriage, or the birth of children or grandchildren. When changing a beneficiary, your insurer will provide you with a change-of-beneficiary form. Assigning life insurance beneficiaries in your will cannot override what’s written in your policy.
For more advice on assigning life insurance beneficiaries read these helpful tips on how to avoid beneficiary mistakes.
We’ve also found these effective resources to be valuable to our members throughout all stages of their retirement life.