Can a child be a beneficiary on a life insurance policy?
Can a child be a beneficiary on a life insurance policy?
A life insurance company will not release a policy payout to a child who has not reached the “age of majority” (typically 18 or 21 depending upon the state). If a minor becomes the beneficiary of a life insurance payout, then the decision regarding what to do with the proceeds is in the hands of the probate court.
Can a minor child be a beneficiary of a life insurance policy?
If minor children have been named as the beneficiary of your life insurance policy, then it can become legally complicated. Minor children cannot directly receive the proceeds of a life insurance policy. Instead, the state would appoint a legal guardian if you hadn’t done so,…
What happens when beneficiaries are not named in a life insurance policy?
However, there have been situations where a beneficiary is not named properly, or there have been problems that come up that cause it to get a bit murky. Depending on the state of the policy and which state the policy holder lived in, there can be many different resolutions to an unnamed or improperly named beneficiary.
How to name a special needs beneficiary in life insurance?
Work with an attorney to set up a special needs trust, and name the trust as beneficiary. A trustee you appoint will manage the money for the dependent’s benefit. Here’s more on life insurance planning for parents of children with special needs .
Can a surviving parent be a beneficiary of a life insurance policy?
If you want to designate someone other than the child’s surviving parent to be the custodian, you need to specify this in your policy. This person will put the death benefit into a custodial account , such as a life insurance trust or UTMA account, to receive the payout as the beneficiary.
If minor children have been named as the beneficiary of your life insurance policy, then it can become legally complicated. Minor children cannot directly receive the proceeds of a life insurance policy. Instead, the state would appoint a legal guardian if you hadn’t done so,…
When do you need to name a beneficiary for a life insurance policy?
Once you have selected a life insurance policy through work or on your own, you will need to name a beneficiary of the policy. “A beneficiary is the person or entity you name in a life insurance policy to receive the death benefit,” according to the Insurance Information Institute (III).
If you want to designate someone other than the child’s surviving parent to be the custodian, you need to specify this in your policy. This person will put the death benefit into a custodial account , such as a life insurance trust or UTMA account, to receive the payout as the beneficiary.
What’s the best way to name a child as a beneficiary?
The best option is establishing a trust for your child and naming the trust as the beneficiary. If you recently became a parent, the safety and well-being of your child is paramount. It is no wonder that the birth of a child is usually a motivator to get life insurance coverage.