Life insurance is different from any other kind of coverage because the policyholder must choose a beneficiary to receive the funds upon his or her death. Before obtaining life Insurance Quotes in McKeesport PA, the person has no doubt already decided who this should be. Typically, this is an adult child, a spouse, or another family member. Financial experts provide advice on how to make the best choice if there is any doubt about naming a beneficiary.
Leaving Money to a Minor Child
One main consideration is not to name a minor child as the recipient after obtaining Insurance Quotes in McKeesport PA. Life insurance companies will not pay to anyone under a certain age. That age may be 18 or 21, and the insurance agent can explain how this works.
The person setting up the policy could have the insurance payment diverted to a trust fund, which still guarantees that the child will one day receive the money. If this is not done and the policyholder passes away before the child reaches the age of majority, the matter goes to court, where a judge appoints a guardian.
Naming a Young Adult as Beneficiary
A parent may want to name an adult child to receive the payment but may worry about this if the son or daughter is young and the insurance amount is large. For instance, this parent may wonder how well a 20-year-old would handle receiving a windfall of $100,000.
It may be possible for an independent company like E.F. Barrett Agency Inc. to match the customer with a policy that pays in installments. There might be four $25,000 installments, for example. The first installment would pay for funeral expenses and provide some additional cash for the young adult to pay for ongoing education.
Primary and Other Beneficiaries
Another consideration is the naming of a primary, a secondary, and a final beneficiary. If the primary beneficiary passes away before the policyholder does, there is no need to make a change to the policy. Also, it’s often possible for something to happen to both the policyholder and the named beneficiary at the same time, such as a fatal car accident.
