Are You Protecting Your Loved Ones? By: Ann L. Bryan (NAPS) Life insurance helps protect your family’s financial security. Some people have coverage through work, while others buy individualpolicies. Regardless of what type of life insurance you have, there’s one small detail that, if overlooked, can cause one big headache: naming a beneficiary of yourpolicy. A beneficiary is the person who receives the proceeds of a life insurance policy when the insured person dies. If you select your spouse as the policy beneficiary, he or she will be paid a benefit at To best protect your family, choose your life insurance bene- your death. Besides individuals, ficiary carefully. entity called a “trust.” you may be uncomfortable know- beneficiaries can be a company, charitable organization or legal Selecting a beneficiary enables you to take advantage of the numerous benefits life insurance can provide your family. Unfortunately, many people decide hastily or even forget to select a beneficiary. Avoid These Traps Not naming a beneficiary—or doing so improperly—can rob loved ones of intended benefits, cause legal complications or create delays and expenses. Asa parent, ing that once your children reach the age of majority, they will be entitled to receive the full pro- ceeds to spend as they wish. If you forget to name a benefi- ciary, life insurance proceeds go into your estate and can be sub- ject to estate taxes. One way to address potential problems is by designating a trust as beneficiary of yourlife insurance policy. Whenfilling out a beneficiary unexpected tax bills. For example, naming a spouse as beneficiary—a form, make sure you precisely indicate the beneficiary’s name, if he or she is unprepared or tionship to you. If you name “my spouse” as the beneficiary and commonpractice—may be unwise unable due to illness to take over the family finances following your death. What if your spouseis the ben- eficiary and then you divorce? If you forget to change the beneficiary to your new spouse, all the proceeds may go—against your wishes—to your former spouse. Appointing young children as social security number, and rela- then divorce and remarry, a court may have to decide which spouse you meant. Because naming a beneficiary is so important, it’s a good idea to ask a knowledgeable insuranceor legal advisor for help with the decision. For 150 years, Aetna has been beneficiaries is also risky. A court- providing for the insurance and financial needs of individuals and reach 18 or 21 years old, depend- people nationwide are covered by appointed legal guardian will hold and manage the money until they ing on state law. This process generally involves legal formalities, businesses. More than 10 million Aetna Life Insurance Company group life insurance plans.
