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Assigning Minors As Your Beneficiaries? Here’s What You Need To Know

Your children or grandchildren are your entire world, and we know you want to be there for them and provide for them as long as you possibly can. One of the many ways you can do this is by purchasing a life insurance policy and listing them as the beneficiaries, so you know the money will go to them and they will be taken care of in your absence. Making minors beneficiaries is very common and not a problem, but there are a few things that you should be aware of when doing so. Knowing the following will help you protect your children or grandchildren financially in the event of your death.

Rules Regarding Minors

If you are going to make a minor the beneficiary of your life insurance policy, it is important to know the rules surrounding them receiving your death benefit. These rules can be specific to the state you live in, but generally:

Most states require that a guardian is in charge to administer the money to the minor if the minor is not 18 by the time of your passing.
If you fail to name a guardian in charge, your next of kin will have to appoint a guardian.
The guardian will be in control of the money for the minor’s benefit until they reach the age of majority, or 18, depending on the state.

As you can see, it is very important that you appoint someone to be in charge of the money until your minor beneficiary is old enough to receive it themselves. Make sure you don’t skip this step: you want to choose the right guardian so you can ensure the guardian will do the right things for the children, and not use the money for their personal use.

What You Can Do

To ensure that your death benefit goes to your children or grandchildren as you intend, and that it does not end up in the wrong hands, put a competent adult in charge of the benefit. If you don’t, the court will appoint one for you, and you will not be able to control what happens to the money.

You should:

Name your children as beneficiaries, but have an adult custodian under your state’s Uniform Transfers to Minors Act (UTMA). You will need to fill out a form for this, if your state allows it.
Make sure this custodian is someone you know will use the money for the minor’s benefits. You should also be sure they will take care of your children or grandchildren until they’re old enough to receive all the money that is left.
Make a will that creates a trust, and name your children as beneficiaries of any proceeds the trust receives from your life insurance policy.

Need Help?

If you want to make sure that your children, grandchildren, or other minors are taken care of when you are gone, you need to find the right policy for you AND know the rules surrounding minor beneficiaries. The best way to do this is to work with a licensed agent who knows the rules and regulations regarding listing minors as beneficiaries in your state. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

What Life Insurance Company Ratings Mean

Think about how you make most of your purchasing decisions. These days, most of these decisions are based on ratings, like online reviews. You want to work with companies that are highly rated, whatever you’re looking to buy – and life insurance companies are not excluded. But when it comes to life insurance companies, it’s about more than looking at online reviews, it’s also about looking at the ratings given to them by external organizations. So how are life insurance companies rated? And what do these ratings mean?

What’s A Life Insurance Company Rating?

Life insurance companies are rated by independent agencies, and these ratings are based on the financial strength of the insurance company. Rating agencies will look at a variety of factors, including how well the company is doing financially, how it is run, and how vulnerable it is to natural disasters.

The independent agencies that provide these ratings are typically A.M. Best, Fitch, and Moody’s. Each agency has its own rating scale and rating standards, which means an insurance company rated A by one agency might not be rated the same by another agency.

What Are The Ratings Based On?

Because each agency is trying to evaluate the financial strength of the insurance company, the ratings are based on certain criteria including:

Amount of cash on hand
Diversity of revenue streams
Quality of insurance policies written
Debt ratio
Risk management protocols

As stated above, each agency has its own rating scales. For example, A.M. Best has 6 ratings for the best insurance companies to work with:

A++, A+ (Superior)
A, A- (Excellent)
B++, B+ (Good)

They also have 10 ratings for companies deemed vulnerable:

B, B- (Fair)
C++, C+ (Marginal)
C, C- (Weak)
D (Poor)
E (Under Regulatory Supervision)
F (In Liquidation)
S (Rating Suspended)

Why Are The Ratings Important?

letter ratings from A being green to G in red — *Ratings are important because you want to make sure that your life insurance plan is from a reputable company that will uphold the policy when you’re gone.*

Life insurance allows you to provide a financial safety net for the people that you love in the event that something happens to you. You want to make sure that, when you pass away, your family will receive your death benefit, but that will not be possible if the life insurance company you worked with goes under. Ratings should be one of the factors you take into consideration before purchasing a policy from a life insurance company: these ratings will help you understand how credible and reliable they are.

Finding A Top-Rated Life Insurance Company

One of the ways that you can check out a life insurance company’s rating is to go to the websites of rating agencies and look up the specific companies you are considering working with. Some agencies will require you to pay a fee before gaining access to these ratings, but there are other ways to access life insurance ratings:

Search the insurance company’s website for their most recent ratings.
Contact the life insurance company and request their most up-to-date ratings.
Search for company reviews from trusted sources that include ratings.
Work with a licensed agent who can look up the ratings for you.

Choosing the right life insurance policy will ensure that your family gets the benefits they need. It might seem complicated and frustrating to find the right one, but it can be done, with some help. The best way to find the right life insurance policy from a company with great ratings is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Can Shopping for Life Insurance Online Save you Time and Money?

If you’ve realized that life insurance is important and worth looking into, that’s great! But are you starting to feel a little anxious about where to start looking, and how to begin comparing plans? Fortunately, you have the ability to shop online with ease and comfort these days – but how do you know if you’ve found the best option for you, and the most savings? Will searching for life insurance online really save you time and money? The short answer is yes, but the long answer is that you have to work with a reputable agent and insurance company, so you make sure you get what’s right for you and your family. Luckily, we can help!

illustration of a hand with a blue curve over the pointer finger — *Shopping online won’t necessarily save you money, but it is more convenient.*

Can You Save Money?

We know you want to save as much money as you can when you’re shopping for insurance, and we don’t blame you! Saving money is important when you have responsibilities and a family that you need to take care of. And we get it, many people think that life insurance is expensive, but it is possible to find a great rate and save money by shopping for a plan online! Life insurance rates will be the same, whether you meet with an agent in person or work with one online: there won’t be any special deals that you’re missing out on by shopping online. But it will be more convenient for you, and you can save money when you do the proper research and have an agent help you compare different plans from different reputable companies.

Can You Save Time?

You can absolutely save time when you shop online for a life insurance policy. You can avoid having to travel to different life insurance agencies to learn about the policies they offer, and then having to take all of that info and try to compare plans before making a decision. When you work with an agent online, you can sit back in the comfort of your home while they will do all the work for you, saving you both time and money. You will not have to go back and forth researching and comparing different policies from different companies; instead, you can save time by working with an agent online from one of the companies below.

Working With A Reputable Company & Agent

Licensed agents can compare plans in minutes, and help you find a policy that is right for you and your family’s needs. They will go over your needs and help you figure out how much coverage is right for you – shopping for life insurance doesn’t have to be a time-consuming and anxiety-inducing experience if you use online tools, or speak with an agent.

Choosing the right life insurance policy will ensure that your family gets the benefits they need. It might seem complicated and frustrating to find the right policy for you, but it can be done, with some help. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Primary vs. Contingent Beneficiaries

There are a lot of things to think about before you purchase a life insurance policy, including what kind of policy you want, how much cash value you are looking for, how long the policy will last, and, not least of all, who will be the beneficiary of your policy, or the person who will receive your death benefit when you pass. What most people are unaware of is that there are two kinds of beneficiaries when it comes to life insurance policies: primary beneficiaries and contingent beneficiaries. It is important to understand the difference, how each works with the other, and if you can have both types on one policy. This will ensure that the right person receives your death benefit when the time comes.

Primary Beneficiary

illustration of a hand holding a money bag — *A primary beneficiary will receive death benefits first, and if they cannot, then a contingent beneficiary will.*

Your primary beneficiary is the primary person that you select to receive your life insurance death benefit when you pass away. Typically this is your spouse or your children. You can choose more than one person as primary beneficiaries, as well as how you would like the death benefit divided amongst them.

Contingent Beneficiary

A contingent beneficiary, also known as a secondary beneficiary, is a person or persons you can add to your policy who would receive your death benefit if something happens to the primary beneficiary/beneficiaries. For example, if you choose your spouse as your primary beneficiary, but they pass away before you, your contingent beneficiary (for example, your children) will receive the death benefit. The contingent beneficiaries will receive the death benefit if the primary beneficiary is dead, cannot be located, or is considered legally incompetent and not able to receive the money.

Primary Vs. Contingent Beneficiary

It is always a good idea to have both types of beneficiary, especially since it doesn’t cost you anything to have multiple beneficiaries. This way, if something happens to your primary beneficiary before the death benefit is distributed, any issues between family members surrounding your benefits will be cleared up. Having a backup will also save your family from going through the court system and paying court fees in order to access your benefits.

About Beneficiaries

You can name almost anyone as the beneficiary to your life insurance policy, including your spouse, children, siblings, parents, or even business associates. Just remember that if you do choose a minor as your beneficiary, they will not be able to receive the payout until they are of age. You can request that the money go into a trust or to a person who oversees the benefits on their behalf.

You can also change your beneficiaries at any time. It is generally a good idea to review your life insurance policy and its beneficiaries when you:

Get married
Have children
Get divorced
Get more assets

Understanding the difference between contingent beneficiaries and primary beneficiaries is important to help your family prepare for the unexpected. You can choose multiple primary beneficiaries, as well as contingent beneficiaries, in case something happens to the primary beneficiary. This ensures that the death benefit is used properly and is not tied up in a legal battle due to confusion or lack of information. Make sure to check your life insurance policy regularly, and update it when needed.

There are many different life insurance companies with different coverage options and prices, which is why it is important to compare all of your options. The best way to do this is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

How Does Debt Impact Life Insurance?

If you have debt, then you know how stressful it can be – and debt is a big issue for many people in the U.S. In fact, the average personal debt for an American is a whopping $90,000! And if you are one of the many people saddled with all of this debt, you probably also stress about leaving your debt behind for your family to deal with when you pass away, or about not being able to leave them anything when you’re gone. The solution? Life insurance can help you pay off your debts AND allow you to provide your family with money when you are gone. But the big question is: can you even buy a life insurance policy when you are in debt, given that life insurance companies look at your finances when you apply for coverage?

Can You Buy A Policy if You’re in Debt?

If you are plagued with debt then you might be worried that you won’t be able to purchase a life insurance policy, but the opposite is actually true. Life insurance companies will approve anyone trying to buy a plan even if they are in debt: after all, you need a policy just as much as other people. In fact, you might have even more reason to buy a life insurance plan, so you can help your family pay off your debt and then some when you are gone.

And fortunately, life insurance premiums are normally inexpensive monthly payments: they can be as low as $30 a month for a healthy 30-year-old. Because policies are so affordable, it’s better to buy now rather than later, since you could end up paying more in life insurance premiums as you age. That’s because the older you get, the more you will pay in premiums for your policy, so it is better to find a plan now that will offer your family financial security at a low rate.

Will Debtors Take Money From Your Policy?

Now you know that it’s possible to buy a policy even if you’re in debt, but will the money go right to your family, or will your debtors come knocking at your door after your passing and claim your death benefits? Fortunately, life insurance is not like other assets: your home, cars, personal belongings, and bank accounts all go into an estate when you pass, which can be used to pay off your debts before the remainder of the money goes to your loved ones. But with life insurance, your beneficiaries will receive the death benefit payout directly and will then be able to spend it however they choose.

Looking For An Affordable Plan?

illustration of an investigator with a magnifying glass looking at a red question mark — *You can still find a great and affordable plan by comparing plans from different companies.*

Your family has financial obligations that will not go away when you are gone: they will need your help more than ever with their expenses, and the last thing you want them to worry about while they are grieving is money. The best way to find an affordable life insurance plan, even if you are in debt, is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Does My Driving Record Matter When Buying Life Insurance?

Your driving record may not seem like a big deal, but it can affect your life in certain ways. For example, if you have accumulated points on your license, the price of your car insurance will go up – but did you know that your driving record can also impact the price of your life insurance policy? One of the things that life insurance companies will look at when determining how much of a risk you are to insure is your driving record. If you seem like a high risk, your premiums will be more expensive, and some life insurance companies might deny you coverage altogether. On the other end of the spectrum, if you’re a great driver, you might be able to get lower rates.

Life Insurance & Your Driving Record

When you apply for a life insurance policy, life insurance companies will request a copy of your driving record, or your motor vehicle report (MVR). The report will most likely include your driving record from the last 5 years, but some reports can go back 10 years or more, depending on the severity of the violations on your record. Once they have this record, they will assess your risk based on your violations, but generally, they will not use speeding tickets from 5-10 years ago against you.

What If You Have Had a DUI/DWI?

illustration of a bottle and a key with a prohibited red sign over them — *If you have a DUI on your record, you could get denied coverage, or have to pay high rates.*

Having a DUI/DWI on your record is one of the biggest red flags for life insurance companies, mainly because being under the influence while driving can lead to an accident, resulting in your death or the death of others. But if you have a DUI or DWI on your record and are wondering if it will be used against you when buying a life insurance plan, the answer is it actually depends on when you were charged with the violation. If you have had a DUI/DWI in the last 5 years, you will either be denied coverage or you will have to pay more in premiums. But it really depends on the life insurance company, since each offers different plans, coverage, and rate options, and each assesses risk differently. That’s why it’s so important to compare different plans from different life insurance companies!

What If There Are Minor Violations On Your Record?

DUIs are taken very seriously by life insurance companies, but what about other less serious marks on your record? Speeding tickets, minor accidents, and other minor infractions might not be held against you as much as other more major violations when purchasing life insurance. Once again, when it comes to rates and how each life insurance company evaluates driving records, it typically depends on the specific company.

If you want to get ahead of the game when applying for a policy, you can request a motor vehicle report from your state’s DMV, review it, and then fill out your life insurance application truthfully. If you don’t include this information, the life insurance company could end up denying your application or your family’s claim and death benefits after you pass away.

You Have Options

If worst comes to worst and you are denied life insurance because of your driving record, you do have other options. You can opt for a no medical exam life insurance policy: with one of these policies, you will not be asked medical questions and the insurance company will not review your driving record. These plans will have higher rates and lower coverage amounts, but you will be able to provide your family with life insurance even if you have no other option for traditional life insurance policies. Also, don’t give up: if you have been denied coverage, you can always apply for life insurance again after some time has passed.

Even if you don’t have a stellar driving record, all hope is not lost. You can still get a great life insurance policy, all you need to do is compare plans from different life insurance companies. The best way to find the right life insurance policy from a company with great ratings is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Tag: life insurance help