Getting a life insurance policy from Aspen Gold Insurance Brokers in Broomfield, CO, is the first step toward providing loved ones with financial security after you’re gone. Naming one or more beneficiaries is equally as important as these are the individuals who will benefit from the proceeds of your policy. What factors should you consider when choosing a life insurance beneficiary?
Your Financial Obligations
When choosing a beneficiary, consider your financial obligations. Do you have a student loan co-signed by your parents that needs to be repaid, even after you’re gone? If so, your parents may need help in fulfilling this obligation. Did you buy a house with a significant other? He or she may need help in paying the mortgage. Did you commit to helping a younger sibling through college? Life benefits can help you fulfill this commitment. By dividing life proceeds between multiple beneficiaries, you can help those who need it most after you’re gone.
Financial Help for Your Immediate Family
You should also consider how your sudden demise will affect your immediate family, i.e. spouse and children. Do you have savings that can help them carry on? Can your spouse’s income cover for the loss of income from your part? Would your spouse be held responsible for outstanding debts? Will your kids have money for college? If your demise would leave your family in financial difficulties, they may take priority in your choice as beneficiaries.
If you’re considering naming minor children as beneficiaries, set up a trust that gives a trustworthy adult authority to manage these finances on behalf of your children until they become adults. This way your children will have their needs met as they grow and funds could be set aside for college.
To learn more about choosing a beneficiary or for information on life insurance options and costs, contact Aspen Gold Insurance Brokers in Broomfield, CO.