Term Life Insurance Articles
Is It Possible To Add Beneficiaries To An Existing Term Life Insurance Policy
2010-02-02
When purchasing a term life insurance policy, you will need to name a beneficiary. The beneficiary is the person (or people) who will receive the proceeds from the policy when you pass away. In many cases, however, the needs of the policyowner will change over the course of the life insurance policy's term, and it may be appropriate to add- or change- beneficiaries to an existing policy.
It is possible to add beneficiaries to a term life insurance policy, or to change the beneficiaries who are named at the time the policy is taken out. In fact, it is a good idea to review your beneficiary designations from time to time in order to make sure that they still reflect your wishes. This is particularly important if you have had a major event in your life, such as a marriage, a new baby, a divorce, or the death or disability of a spouse. In the event of a new baby, it is possible to specify that you want 'all living and future natural and adopted children' to be beneficiaries in equal shares of your term life insurance policy. This prevents you from having to fill out a form to change the beneficiaries every time a child is born. The number of beneficiaries you name has no bearing on the cost of the policy, so it will not affect your term life insurance quotes.
There are a few things to keep in mind when adding or changing beneficiaries to your term life insurance coverage. First of all, remember that the owner of the policy is the only person who can add or change the beneficiary of the policy. The owner of the policy is usually, but not always, the insured. For example, if a parent takes out a life insurance policy on a young child, then that parent is the owner of the policy, and is therefore the only one who can add or change any beneficiaries. The child, who is the person that is insured, cannot add or change beneficiaries. You can also name contingent beneficiaries, who are the people who will inherit the proceeds of your term life insurance policy if the primariy beneficiary(ies) should die before you do. A beneficiary can be a person, a company or a trust.
You can (and should) carefully consider who will receive the proceeds from your term life insurance policy, and you should revisit this decision periodically. Adding or changing a beneficiary is usually as easy as filling out a form provided by the insurance company, and it can make sure that your wishes are carried out as you fully intended.
