Planning ahead is crucial no matter how old you are or where you currently are in life. If you have family and dependents then life insurance is an important step to help secure their future and is therefore vital to have. By planning ahead, you gain peace of mind that, whatever happens, they will be able to manage financially and that any assets you have will be dealt with as you wish.
Beneficiaries and Trusts
A beneficiary is a person or persons that you name in your life insurance policy to receive the insurance money when you die. Many people also name a contingent beneficiary, should you outlive your primary beneficiary.
It is important to carefully consider who to have as your beneficiary and make any amendments should your decision change. It is common to have a minor named as a beneficiary and in these cases a trustee will become responsible until they are old enough. The person named will receive the proceeds from the insurance company without being subject to probate or federal estate tax payments.
Planning ahead could also mean setting up a trust and have the trust purchase the policy. If you choose not to have beneficiary or trust, then your proceeds will go through your estate and will more than likely be subject to taxes.
How to deal with finances
If a valid will was left then the person who deals with the estate is known as the executor. If an invalid will or no will was left then the person dealing with this is known as the administrator and will often be appointed by a court. When making a claim on a life insurance policy you should contact the insurance company as soon as possible. You will then be told what you need to do and the forms and documents that they require. These will include the death certificate and information regarding the policy itself.
It is also important to deal with other affairs, such as informing banks, utility companies, the Inland Revenue, mortgage lender, any stocks and shares and any other policies that the deceased may have had. It is therefore vital that you can locate all paperwork quickly and easily.