A life insurance policy provides financial protection for your loved ones. By paying regular premiums, you ensure your beneficiaries receive a cash benefit after your passing. The guide below offers tips for naming these individuals and also talking to them about your plans.

How to Name Beneficiaries

A policyholder can name one person or multiple people to receive the life insurance payout. Most policyholders choose children or grandchildren, a spouse, siblings, or parents. However, you can select anyone who is special to you, including an unmarried partner, friend, or colleague. You could also appoint a charity or business as the recipient of the payout. However, make sure to update your policy if one of these individuals falls out of your life. Contact your insurer and provide them with the necessary information; they will send you a form to complete and submit.

You can also include plans for what should happen if you outlive one of the beneficiaries. There are two options for this type of situation. One is called per capita, in which the remaining beneficiaries would equally inherit the share of the deceased beneficiary. The other is per stirpes, which means that the immediate next-of-kin—usually the spouse or children—of the deceased beneficiary will receive their share of the payout.

How to Discuss Your Policy

Talking about end-of-life matters can be uncomfortable. However, being open and honest will reduce uncertainty among your beneficiaries. Sit down with them and tell them that you've purchased a life insurance policy. 

Have a copy of the policy on hand, so you can explain it to them and include them in the experience. Let them know where the document is located—many people store their policies in safe deposit boxes—and how to access it when the time comes. This may also be an opportunity to discuss other wishes regarding your passing. In this way, you can prepare them for an unexpected accident while also relieving both of you from the need to have this conversation if you fall actively ill or become injured when it might be more stressful.

When you need a life insurance policy that meets your needs and goals, contact David Seagraves Insurance Agency. Serving the Littleton, CO, area, David offers various insurance solutions, including life, auto, home, and rental policies. Look out for your loved ones and their future, and request a life insurance quote by calling David's office at (720) 588-8002 or visiting his website.