The purchase of life insurance is a common financial planning tactic for North Carolina families, providing financial protection for survivors when the family breadwinner has passed. Your Greensboro life insurance coverage is something that can mean a world of difference to as husband or wife left behind as well as to children who may require financial support until they're able to support themselves.
A primary purpose of life insurance, whether it's whole life, term life or universal life, is to allow the beneficiary or beneficiaries to have continued financial support after they have lost the person who was previously providing that financial stability.
The benefit received from a life insurance payout may be used wherever it's needed, whether that means paying off outstanding loans such as a home mortgage or taking care of funeral expenses. As a father of small children, you may be taking out a Greensboro life insurance policy to ensure that, should you pass away unexpectedly, your family may continue living in a fashion to which they've become accustomed and have the funds needed to send the kids to college.
Beneficiaries
Part of taking out a life insurance policy is choosing and naming a beneficiary or beneficiaries. This could be:
- A person or persons
- Your estate
- A charity
- A trust
- A business (as in key person life insurance)
The beneficiary is the person, persons or entity that will receive the proceeds of your life insurance policy when you pass.
There are two types of beneficiary designations:
Primary beneficiary - the person, persons or entity that will receive the proceeds of your life insurance policy at the death of the policyholder
Contingent (or secondary) beneficiary - only entitled to receive proceeds from the policy if the primary beneficiary dies before the policyholder
Multiple Beneficiaries
You may name more than one primary beneficiary if desired, in which case they will receive either equal portions or a stated specific percentage of the death benefit when you pass. There are two ways to select multiple beneficiaries:
Per Stirpes - beneficiaries are designated by lineage, with policy proceeds being equally divided among beneficiaries and/or their surviving children
Per Capita - policy proceeds are equally divided among all beneficiary survivors. Click here for a more detailed explanation of Per Stirpes and Per Capita designations.
If a beneficiary dies before the policyholder, he or she must be renamed as soon as possible.
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