What exactly is a beneficiary and why is important?
What exactly is a beneficiary and why is important?
We have all heard of a family that has erupted into chaos after a relative passes away without leaving a beneficiary, or whose beneficiary is someone with whom the deceased no longer has a connection with. You are convinced that this would never happen to your family, but have you done everything you can to avoid it?
What is a beneficiary, and why is it important?
Selecting the right beneficiary is an important decision and should be a priority. Anyone selected in your Estate Plan who will eventually benefit from your estate is referred to as a beneficiary. To simply put it, a beneficiary is someone who receives your belongings when you pass away. The benefits could be monetary or in the form of anything else you decide to pass along. Beneficiaries are an important part of your plan, as they give purpose and guidance for what you are leaving behind.
You can list more than one beneficiary and it does not always have to be a relative.
Here are some examples of beneficiaries:
§ A person (or multiple people)
§ A trustee for a trust you have established
§ A charity or non-profit organization
§ Your estate (in the case of a life insurance policy)
What is the importance of having a beneficiary?
As previously mentioned, selecting a beneficiary is important not only to avoid confusion after your death, but also to ensure that your money and valuables go where you want them to go. You can have peace of mind knowing that your family will be financially secure when you are no longer with them by choosing a beneficiary or beneficiaries.
Here are three important reasons for choosing a beneficiary:
1. It clears up any misunderstanding. You may eliminate any doubt about what you want to happen with your hard-earned money or insurance payouts by having a current beneficiary on all your accounts.
2. It helps save time. If you die without naming a beneficiary, the transfer of any funds in such accounts will be delayed. In some cases, the delay could be severe, involving the compilation of a large amount of paperwork by the person in charge of your affairs or estate. The impact could be severe if there are any last expenses to be paid.
3. It ensures your loved ones' financial well-being. This is especially true when it comes to life insurance, which is designed to give money for a specific reason, such as helping to meet funeral costs or replacing income.
When do I need to name a beneficiary at Jannou?
At Jannou Credit Union there are few occasions where you will be requested to select a beneficiary.
The first instance would be the moment you come in to open an account. Section 8 on the application “Appointment of Nominee” should be filled out completely and accurately. You are required to fill out your beneficiary’s maiden name, (no nicknames or alias), telephone number, address, in addition the proportion to be paid to each person, if there are more than one beneficiary. Before submitting the form, please double-check the information.
Second, on selected Jannou products or services, eg FIP or medical insurance, you will also be requested to choose a beneficiary. The same applies when filling out this information.
Remember to keep your beneficiaries name updated!
References
Hicks, P. (2020). Beneficiary - What is a Beneficiary & How to Choose One. Trust & Will. https://trustandwill.com/
solutions, R. (2021, September 27). What Is a Beneficiary and How Do I Choose One? Ramsey Solutions. https://www.ramseysolutions.
Why It’s Important to Name a Beneficiary. (2019). Www.cpai.com. https://www.cpai.com/
