Life insurance can help to ensure that your loved ones have financial security should something happen to you. Once your policy is in place, it’s important to make sure you don’t neglect the final stages of the planning process: telling your beneficiaries about the protection and making sure everything they need can be readily located when they need it.
Below are four ways you can make sure your beneficiaries have all the information they’ll need:
1. Let your beneficiaries know they’re covered.
Make sure that your beneficiaries know that they’re covered and that they’re clear on the details, including the amount of the policy. Provide them with a copy of your policy. You may want to share scanned copies of the original documents in a clearly titled email for their reference. You should also ensure that you have paper copies in a secure place and that your beneficiaries know where these are kept.
2. Get the details on your beneficiaries to include in your policies and accounts
It’s important to have information about your beneficiaries and provide them to your lawyer and financial representative. To help someone locate your beneficiaries, you’ll need critical pieces of information: full beneficiary names (double-check that you have the correct spelling), social security numbers, physical addresses, email addresses, and all phone numbers. If you have passport photos or any other information that would lead to ascertaining their identity, this could prove helpful.
3. Keep your policies up to date
Review your policies regularly to ensure that all information is accurate and that your beneficiaries are properly listed. Be sure to revisit your policies in the event of a significant life change, such as a divorce or a birth of a child. List specific names for beneficiaries rather than terms such as “spouse” or “child” to help avoid confusion.
4. Create a plan of action for your beneficiaries
Keep all your records organized and in a safe place and make sure that your beneficiaries know where to go for information. As a backup, keep a duplicate set of records in another physical location, such as with your lawyer or at the home of another responsible relative. Make sure your files include the numbers and keys of any safe-deposit boxes you hold and all pertinent contact information and account numbers. If you use a cloud-based platform to secure your documents or passwords, make sure that your beneficiaries know how to access these.
Most people arrange to have an “executor,” usually a lawyer, who has been instructed to take care of essential practical matters after you’re gone. These tasks could range from funeral arrangements to securing a death certificate (essential in receiving money from life insurance) to closing out certain personal accounts, such as online profiles. Make sure that your beneficiaries understand who is appointed as your executor and are clear on the process.
You’ve prepared to financially protect your beneficiaries, so going one step further and keeping updated information readily available to those who may need it will make the process easier. Plan to discuss all your plans with your lawyer, financial representative, beneficiaries, and anyone else who may need the information to ensure your plans are fulfilled.