Choosing your final expense beneficiary is a big decision. Here’s what you should keep in mind as you figure out what works best for you.
How Final Expense Works
First, it’s important to know how final expense insurance works in order to make an informed decision. The biggest thing you need to keep in mind is your death benefit.
The death benefit is a sum of money your beneficiary receives on your behalf when you, the policyholder, pass away. For final expense, this ranges anywhere from $2,000 to $50,000. However much your policy is worth is how much your beneficiary will have to figure out what to do with.
Factors in Choosing Your Beneficiary
So, the person you choose will be responsible for your money when you’re no longer around to manage it on your own. Choosing the right person, then, is obviously very important.
You can actually choose more than one beneficiary. In fact, having two or more is often recommended. That way, you have individuals who can:
- Help manage the finances and make sure your costs are paid to the right people and on time.
- Hold each other accountable to use the money responsibly. Unlike a will, your beneficiaries aren’t legally required to use the death benefit the way you intended.
Because beneficiaries aren’t legally required to responsibly use your death benefit, it’s incredibly important that you choose a person or people you can trust.
You also want to make sure that the person you choose can handle tough conversations. End-of-life costs are not a fun discussion to have, and not everyone is up to the task of making plans ahead of time.
Who You Shouldn’t Choose
There are other factors to keep in mind as well that can influence your decision. Save yourself and your loved ones from any legal complications by choosing an adult — anyone under 18 may not have access to the death benefit until they’re of age, and that may cause problems with financial planning, and bring on more work for yourself.
You also want to make sure that the person you choose is around to receive and properly use your death benefit. Choosing your spouse may seem like a no-brainer, but if they were to pass away before you, you will have to choose a new one. Or, if they receive the death benefit but pass away shortly after you do, the funds may not go where they need to. If you want to choose your spouse, we highly recommend choosing a second or even third beneficiary as well.
We’ll Support You Through Every Decision — Call Memorial Insurance Group
Some of these conversations and decisions are tough. With Memorial Insurance Group, you can be sure you have experts on your side so that you can focus on what’s important. Reach out to us today to learn more about final expense.