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Can I Name More Than One Beneficiary on My Life Insurance Policy? | Quotacy Q&A Fridays - YouTube
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Welcome to Quotacy's Q&A Friday
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where we answer your life insurance questions.
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Quotacy is an online life insurance agency
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where you can get life insurance on your terms.
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I'm Jeanna and I'm Natasha.
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Today's question is:
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can I name more than one beneficiary
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on my life insurance policy?
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Yes, you can have multiple primary beneficiaries.
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And not only primary beneficiaries,
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but we also recommend you name contingent beneficiaries.
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To quickly explain what these are,
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primary beneficiaries are the people you want your
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life insurance money going to.
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Contingent beneficiaries are the people you name
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as backups should your primary beneficiaries die before
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or at the same time as you.
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These backup beneficiaries only receive the money if the
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primary beneficiaries are unable to.
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The main reason you buy life insurance is to
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financially protect your beneficiaries
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so ensuring you set them up properly is important.
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If you have multiple beneficiaries listed on your policy
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also list what percentage of the death benefit
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you'd like each person to receive.
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No matter how many beneficiaries you have
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the total percentage amount needs to add up to 100%.
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For example, if you name your wife and mother
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as your two primary beneficiaries you can state
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that you want them to split the benefit 50/50
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or you can even state that your wife gets 90%
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and your mother gets 10%
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or your wife gets 60 and your mother 40.
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You can designate whatever percentages you want
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as long as it adds up to 100.
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If you have multiple beneficiaries and do not state specific percentages
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the life insurance company will assume the proceeds
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are to be paid out equally.
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You can also name a trust or entities as beneficiaries.
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Entities can be businesses, churches, charities, etc.
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For example, you could state that you would like
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75% of your policy's death benefit going to your sister,
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15% of the benefit going to your church,
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and the remaining 10% going to the
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local animal shelter you adopted your dog from.
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So, you've learned that if a primary beneficiary dies
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before or at the same time as you
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their benefit goes to a contingent beneficiary.
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But what happens if you have more than one primary beneficiary
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and only one of them dies?
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What happens to their share of the death benefit?
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There are three things that can happen if a primary beneficiary dies.
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On your policy you can specify that your proceeds are distributed
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per capita, per stirpes, or not specify either one.
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Per capita means that the proceeds are
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distributed equally between the surviving beneficiaries
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and the deceased beneficiaries' descendants.
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Per stirpes means that the descendants of the
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deceased beneficiary splits only the deceased's share.
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Let's look at a few examples to help explain
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how these distributions work.
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You have a life insurance policy.
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You name your sister and two brothers as the primary beneficiaries.
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Your sister has two children and each brother has a child.
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First example:
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you have a life insurance policy.
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You name your sister and two brothers as the primary beneficiaries per capita.
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You die and all your siblings are alive.
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Your sister and two brothers divide the
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death benefit into three equal shares.
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But let's say you die
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and your sister has also passed away.
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Per capita states that the death benefit now is split
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into four equal parts.
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25% going to each brother and 25% going to each
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of the sister's two children.
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Second example:
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you name your sister and two brothers
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as the primary beneficiaries per stirpes.
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If you die and and all your siblings are alive,
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your sister and two brothers divide the
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death benefit into three equal shares.
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But let's say you die and
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your sister has also passed away.
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Per stirpes states that the two brothers each still
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receive their third and your deceased sister's third
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is split between her two children.
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Third example:
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you name your sister and two brothers
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as the primary beneficiaries and do not specify
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either per stirpes or per capita.
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If you die and all your siblings are alive,
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your sister and two brothers divide the death benefit
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into three equal shares,
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but let's say you die and your sister has also passed away.
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Now the two brothers simply split the proceeds into two equal halves.
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Final example:
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you have a life insurance policy.
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You name your sister and two brothers
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as the primary beneficiaries and do not specify
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either per stirpes or per capita.
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You and your siblings are all going on vacation together
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and tragically die in a plane crash.
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The death benefit now goes to whomever you listed
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as a contingent beneficiary.
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No matter how you want to set up your policy's beneficiaries
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we can help.
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Apply for life insurance online through Quotacy
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and your agent will keep you updated
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every step of the way
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and can help you with any questions.
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Thanks for watching.
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If you have any questions about life insurance
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make sure to leave us a comment.
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And if you have any questions regarding today's topic
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check out the blog link posted below.
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Otherwise, tune in next week when we answer the question
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will the cost of my term life insurance policy
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be the same as my quote?
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Bye!
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Thanks for sticking around.
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We'd appreciate it if you Liked the video and
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hit that fancy little Subscribe button to see us every week.
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Bye!
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