Why is it critical to routinely conduct a beneficiary checkup?
Consider this true story.
A woman’s spouse died unexpectantly.
The grief-stricken woman contacted the life insurance company to begin the process of claiming the funds that would enable her to remain financially stable. Unfortunately, following his divorce to his first wife, the now deceased spouse neglected to change the beneficiary of his life insurance.
The beneficiary designation overrode the will and the one who ended up benefitting financially from his death was his ex-wife. (And no, she didn’t give it to the new wife.)
With that story ringing in my ears, I decided to conduct my own beneficiary check-up.
I correctly assumed that the designee of my life insurance would be Brian.
However, what surprised me, was that my mom was listed as contingent beneficiary.
(A contingent beneficiary is one who inherits if the primary beneficiary has also passed away.)
At the time, the designation made sense. Our kids were all minors, and my mom would have become the primary caretaker in the event we both died.
However, my mom is almost 89 and our kids are adults. The contingent designation no longer fits this stage of our lives.
If Brian and I both pass and my mom would happen to no longer be living, it could be a long, expensive process to sort it out.
I was glad that I had not assumed all was well.
What is a beneficiary checkup?
A beneficiary checkup is exactly what is sounds like. Taking the time to log into all of your accounts to ensure that the designee is exactly who you want it to be.
When is it critical to conduct a beneficiary checkup?
Any time there is a major life event, it is critical to conduct a checkup.
In the hustle and bustle of life, it’s easy to put off doing the little things, like changing a beneficiary.
After a while, it no longer enters your mind and you assume all is well.
If there has been a major life event, make it a priority to review beneficiaries on all financial products, not just life insurance policies.
Make doing a beneficiary check up a routine part of your life.
Create a prompt that will be a reminder to do a beneficiary checkup.
When the time changes, we are prompted to remember to change the batteries in our smoke alarms.
Tax time might be the ideal prompt since finances are already a priority.
Don’t assume nothing has changed. It’s amazing how quickly things change without you even giving it any thought. (Like your kids becoming adults and your mother becoming elderly.)
Routinely checking your beneficiaries, even if nothing has changed, can prompt you to consider whether your original choice still fits your situation.
Make sure to conduct a beneficiary check up on all financial products.
Hearing the word beneficiary automatically makes most people think of life insurance. However, many financial products have beneficiaries assigned to them.
Make sure to conduct a beneficiary check up on all accounts.
Since you are already focusing on updating information, take the time to update your Just in Case File!
The days may be long, but the years are most definitely short.
Just in case your years are shorter than you planned, by routinely conducting a beneficiary checkup, you can ensure that the person you want to benefit from your death, actually does.
Note: my posts are designed to be short, easy reads with one main point. The entire scope of beneficiaries is huge but important. I am including a link to another site for those who might want more information on the subject of beneficiaries. Naming a Beneficiary
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