BENEFICIARIES: Have you checked yours lately?
Beneficiaries are typically assigned to any instrument or account that has current or future cash value. These assets may be bank accounts, investment accounts, insurance policies, etc.
When a policy or account is opened with an institution, the beneficiaries are designated by the owner of the specific instrument. Could there be a problem with this? Initially, no… But eventually, yes.
According to the Life Insurance Marketing Research Association (LIMRA), over 20% of claims paid on life insurance policies are to “unintended beneficiaries“. An unintended beneficiary is, for example, a divorcee’, a predeceased spouse, perhaps a charity that no longer exists or is out of favor, etc. Rest assured that similar statistics apply to bank and investment accounts as well!
How can we prevent this? All accounts and policies that we control should be reviewed and updated continually, at least annually. This should be part of our annual financial review. The responsibility for this maintenance does not rest with your advisor or financial institution, but with you, the owner.
You should decide whether or not the beneficiary is aware of his/her potential benefit. If something happened to you, would someone else know what to do and where to look?