Beneficiary Issues Flashcards
Beneficiary Designations
Person, business, charity, trust, or estate that received death benefit
Beneficiary designations are chosen by…
Owner
Beneficiary designation can be the owner but cannot be…
The insured
Revocable Beneficiaries
Can be changed by the owner without permission
Irrevocable Beneficiaries
Cannot be changed by the owner without permission
Irrevocable beneficiary might need to be consulted before…
Owner can borrow from cash value or cancel the policy
Primary Beneficiary
First in line to receive death benefits
Contingent Beneficiary
Paid if primary dies
Tertiary Beneficiary
Paid if primary and contingent die
Deceased’s estate is paid if no beneficiary but…
Can experience tax and probate problems
Specific Beneficiary
Beneficiary that is clearly names
Class Beneficiary
Beneficiary that is vague, such as “my children,” “my spouse,” etc
Per Capita
Gives deceased beneficiary’s money to the surviving beneficiaries equally
Per Stirpes
Gives the deceased beneficiary’s share to their estate
Trust
Created when intended beneficiary is a minor or significantly disabled
