Can A Minor Be Used As A Beneficiary?

Can A Minor Be Used As A Beneficiary?

If you’re purchasing life or final expense insurance to provide for your family, you may be wondering if you can name one of your children as a beneficiary.  If your child is a minor, the situation can become complicated.  There are a few important things you should know when picking and appointment a beneficiary.  In this blog, we’ll discuss the process of picking a beneficiary and a few things that should be kept in mind.

Picking a beneficiary can be difficult and painful, but it’s a necessary step in making sure all of your affairs are in order.  End-of-life situations can be unpredictable, so it’s always best to plan ahead and make sure your family is prepared.  One of the best ways to do this is to appoint a responsible, trustworthy beneficiary who can carry out the necessary tasks you’ll ask them to.

Appointing a minor

When you’re choosing a beneficiary for a final expense policy, you may want to choose your child.  They’ll most likely be involved in funeral and burial arrangements and can use the death benefit to cover those costs.  In fact, picking a minor as the beneficiary may seem like the best solution.  In reality, it will be complicated and make the entire process more difficult.  Picking an adult is the best way to simplify the death benefit process and ensure that the insurance company will release the death benefit to the appointed beneficiary.

If your child is a minor, it’s technically possible to appoint them as a beneficiary.  However, insurance companies will not release the death benefit directly to a minor, even if they are the beneficiary.  Instead, an adult will be appointed to manage the funds.  This is important to understand.

While you may want to select a minor as beneficiary, to ensure that they have access to needed funds, it’s strongly discouraged.  Because an adult will be appointed anyway, it’s most likely best for you to choose an adult beneficiary from the beginning.  Start by finding someone you trust and then asking them if they’re willing to assume the responsibility of a beneficiary when the time comes.

How to choose a beneficiary

Now that you know your chosen individual should be 18 or older, you can begin thinking about everyone you know that could be a possibility for the beneficiary.  When you have someone in mind, you can approach them and ask if they’re willing.  Keep in mind that this could be a difficult decision for them, as you’re asking them to imagine a challenging time.  Making decisions while you’re grieving can create an increased level of stress, so it’s understandable if they choose to pass on the beneficiary offer.

It’s important that you trust your beneficiary and have clear, open communication with them.  Being honest about how you want the death benefit to be spent, as well as any arrangements you would like to be made after your passing, is important.  Your beneficiary will be in charge of allocating the death benefit, so make sure that they’re capable of doing so.

The beneficiary you choose does not have to be within your family.  While it is common to choose a child or spouse, it’s also possible to choose a close friend.  When thinking about a beneficiary, think less about who’s family and more about who’s eligible.  The most important thing to think about is whether or not you trust them and if they’re willing.  Finding someone suitable to be a beneficiary can be challenging, so make sure that you’re firm in your decision.

Now that you’ve chosen a beneficiary, you must consider what you and your family personally need. Firstly, understand that all of your monetary assets—from your home to life insurance and 401k—must be considered and distributed.

Once you know how much you have to give, determine who would be in the greatest need once you are gone or what area you would like to provide for most. If you have dependents in your immediate household, you can set aside funds for their daily expenses to substitute your income. Is there a large cost that’s a priority for you?  Is it more important that your student loans are paid, your mortgage is covered or your car payments are taken care of?

It’s possible to establish certain conditions when beneficiaries can access the funds—many people will withhold the payout until the beneficiary reaches a certain age, graduates college, or reaches another big life milestone. Overall, be sure that your will and/or life insurance policy’s conditions are to your standards and the needs of your loved ones.

If there are milestones that the beneficiary must meet, make sure they’re aware of that ahead of time.  Everyone involved with your insurance policy should be aware of the specifics and their role in the process.  If someone needs to accomplish something or take care of a certain task, it’s important that they know that and can plan accordingly.  You have every right to put stipulations on the death benefit, just make sure that they’re official and recorded.

Know the specifics

Once you’ve chosen a beneficiary, make sure they’re aware of the details of your final expense policy.  It may be helpful for them to make an appointment to speak with your insurance provider, so they can learn about any important details or specifics they should be aware of.

Choosing a policy is important and it’s equally important that those close to you are aware of that policy.  Once you’ve selected an insurance policy, you and your beneficiary can work together to make sure that plans are in order if you pass away.  Being able to plan for the future is one of the biggest benefits of any insurance plan.

Selecting a beneficiary is important.  It’s best to choose an adult that you’re close with, so that you can have discussions about your wishes and how you’d like the death benefit to be spent.  If you’re wanting to discuss your options or provide your beneficiary with information about your policy, make an appointment to speak with one of our professionals.


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