Are Your Life Insurance Beneficiaries Ready for Their Roles?
According to a survey by the National Association of Insurance Commissioners (NAIC), many beneficiaries are not prepared for the role of receiving life insurance benefits after the passing of a friend or relative. The survey yielded the following results:
Beneficiaries who feel prepared with the information they need
More than not being prepared, many people are “oblivious beneficiaries”. Without knowledge of a policy, or the information needed to make a claim, all of the policyholder’s efforts to protect their family and legacy may be futile.
Whether their policy’s death benefit provides income replacement, a reasonable buyout price for your family-owned business, or funds to pay college tuitions for your children — your loved one probably wanted to make sure their financial objectives are honored and that the money transfers to you — even if they’re not there to take control.
What vital information does a beneficiary need?
As a policyholder, it is important to communicate the essentials to your beneficiaries who may be younger or less familiar with the life insurance industry. Remember, for privacy reasons, the life insurer will not even respond to a person’s inquiry about whether or not they are a beneficiary, until there is proof that the death occurred.
If you are a beneficiary and need assistance locating a life insurance policy, check out the NAIC’s Life Insurance Policy Locator.
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1Intuit Turbo,”[Survey] Top Causes of Gen Z’s Financial Stress,” April 16, 2019.
2Business Insider, “Meet the average American millennial, who has an $8,000 net worth, is delaying life milestones because of student-loan debt, and still relies on parents for money,” December 25, 2019.
3MarketWatch, “All the ways Gen X is financially wrecked,” July 17, 2019.
4CNBC, “Baby boomers face retirement crisis — little savings, high health costs and unrealistic expectations,” April 9, 2019.
5,6National Funeral Directors Association “2018 Cremation & Burial Report”.
7The balance, “How Filial Responsibility is Defined,” October 25, 2019.
Sagicor Life Insurance Company, home office Scottsdale, Arizona issues life insurance and annuities . Products not available in all states and state variations may apply. Products have limitations and restrictions including surrender charges.