Beneficiary Designations: A Small Detail with a Big Impact

Choosing a beneficiary is one of the most important decisions a life insurance policy owner can make. Because personal circumstances can change over time, beneficiary designations should be selected carefully and reviewed regularly.

To help simplify the process and reduce the potential for delays, we have developed the following guidelines. While the examples provided are common approaches, please keep in mind that individual insurance carriers may have their own specific requirements.

In recent years, many carriers have begun requesting additional beneficiary information, such as mailing addresses and Social Security numbers. While some clients may be hesitant to provide these details, the information plays an important role in helping carriers identify, locate, and verify beneficiaries when a claim is filed.

When a beneficiary is unaware of a policy or cannot be located, benefits may be delayed or, in some cases, difficult to distribute. As a result of increased regulatory scrutiny and legal obligations, carriers now collect more detailed beneficiary information to improve their ability to locate and pay beneficiaries promptly after an insured’s death.