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November 9, 2021
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Choosing a Life Insurance Beneficiary If You Are Single

Choosing a Life Insurance Beneficiary If You Are Single

If you have life insurance, then you will name a beneficiary. The beneficiary is the person who will receive the death benefit payout upon your death. You want your life insurance to help your survivors move on financially. However, choosing the right beneficiary might feel like a big challenge, particularly if you are single.  

Still, if you are single and are in the process of getting life insurance, you have a lot of freedom to choose the beneficiary who you think will be most capable of settling your final expenses. Choosing a beneficiary for your policy is completely up to you. Still, you should put appropriate thought into naming the right recipient.  

Consider how the following individuals might benefit from your policy: 

  • Your children. If you have children, then they may be the best options to name as beneficiaries. You can even structure your policy so that each child receives a certain percentage of the funds. If the children are still minors, you may wish for the funds to pay into a trust that is overseen by a named trustee, which can help to care for the children’s needs until they reach a certain age. 
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  • Other dependents. Are you taking care of an elderly parent? What about a disabled adult child? These individuals might benefit from being named your life insurance beneficiary. However, you might still need to put this money into a trust because this individual might not be able to make financial decisions for themselves. 
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  • A charity. You can leave?the funds from a life insurance policy to a charity if that is what you like. The money can be donated to the charity at the time of your death, in your memory. 

Your estate. The funds can be funneled into your estate. This means the money is split to pay your creditors and then split with your heirs. This gives you the least amount of control over your life insurance money and if you fail to name a beneficiary on the policy, then the money will default to your estate anyway. 

Plus, there are countless other people who you might decide to make beneficiaries on your policy—friends, siblings, business partners or extended relatives. In reality, the decision of who to name as a beneficiary is entirely up to you, and as a single individual, you have a lot of room for leverage. 

The choice of beneficiaries is an important part of life insurance decisions. And, it always helps to have more than one listed on the plan (in case the first person cannot accept the funds). Take a few minutes to discuss your needs with your loved ones so you can make the best decision going forward. 

 

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