When you purchase a life insurance policy for yourself or a family member, there are a number of important decisions to be made. Deciding what company to choose, how much cover to purchase and what type of policy you need are all vital. But once you’ve determined each of these factors, there is still one more important decision to make. Who will be the beneficiary of the policy?
The beneficiary is the person who receives the payout from the policy when you die. To avoid any legal problems, insurance companies generally require policyholders to designate a beneficiary, in writing, when they purchase the policy. While choosing a beneficiary might seem like a simple matter, there are some important things to consider before you write a name on your insurance application.