Is There An Age Limit For Beneficiary Of A Life Insurance?
Nowadays, insurance needs is becoming a necessity
, this is the reason why many kinds of diversified life insurance being introduced by its industry. Whole life plan, endowments and term life policies form part of the products. In whole life policies, endowments are awarded to the policy holder, if still alive, at the time of maturity date of the plan. While term life policies grant the cash value only if the insured passes away before the term of the policy expires. The aforesaid policies are capable of assigning a beneficiary.Beneficiary defined
A beneficiary is one who accepts the sum of cash once the plan holder dies, that is if the policy is in effect. Most insurance policies necessitate you to assign a beneficiary. Hence, lots of limitations are imposed by the state laws. They even hire the service of underwriters who evaluates your application as well as that of your beneficiary. They make sure that the person you named as a benefactor on your plan meets the requirements enforced by laws in the state. After that, you will be notified if the beneficiary is disqualified so that you can replace them.
On Determining an Insurable Interest
Basically, when designating a beneficiary you must assign a person that has an insurable interest in your death, because, it has a financial effect on the benefactor if the plan holder dies. You may have an unlimited insurable interest in your life and health plan. However, just as what is required in most countries, it is enough to prove an insurable interest if you are a spouse, sibling, grandparent, parent or dependent of the insured.
Select an Eligible Beneficiary
Having yourself covered with a life insurance, give you the sole right to designate on whoever will your beneficiaries be, unless otherwise, the company or the state have particular stipulations that may disqualify your personal preferences. Age is immaterial in assigning their recipients. But you must consider age as one of the factors in designating a beneficiary, especially if you are naming a minor child. Payment on claim cannot be claimed by minor children. Secondary beneficiary can be designated just in case the primary beneficiaries no longer exist. You too, can name as many primary beneficiaries as you can without age limit if you designate the proportions in which the benefit is rewarded. You can decide to whom your direct proceeds should go.
Minors and Elderly Beneficiaries
In case your beneficiary happens to be a minor, the insurance company will oblige you to appoint an adult to stand as trustee or custodian to the death claim benefit. If you assign an older person than yourself, say, a parent, you should name a secondary beneficiary to collect the proceeds if the primary beneficiary dies ahead of you. Then again, you may need to update your plan, especially if your mind changes. Be careful in choosing a beneficiary because they are the ones who will ultimately be benefited by your will.
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