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August 16, 2022
A beneficiary is simply a person chosen by you who will receive a monetary payment upon your death. It may sound unpleasant, but designating one but it is one of the most significant stages in enrolling in a group benefits plan, and there’s a lot to think about.
It’s not always necessary to name someone in a group health insurance plan, but your Life Insurance provider will demand it if your policy covers life insurance (as most do). In the case of a covered plan member’s death, benefits are paid to those specified individuals.
Spouses, common-law partners, children, and other dependents are all eligible for this type of gift. You may also designate another family member, such as a brother or sister, a friend, or even a charity! You can name more than one, as long as the split equals 100%.
For example, a Life Insurance policy of $100,000 could be broken down like so:
Spouse: 80% = $80,000
Child 1: 10% = $10,000
Child 2: 10% = $10,000
If you name a minor or someone with special needs, you must choose a trustee until they reach the age of majority (more on that below).
Yes! They are, in fact, one of the most common beneficiaries. Keep in mind that if you name a recipient who is under the age of majority, they will be unable to access the money until they reach adulthood. In this situation, you must choose a Trustee who will manage the funds until your dependent becomes an adult.
When you join a group insurance plan, one of the first things you’ll do is name beneficiaries. Here are six things to think about before naming one.
Consider who you would want the funds to go to when you’re gone since the beneficiary of your Life Insurance payout will be this individual. Consider those who rely on you financially — could your spouse handle the mortgage payment without your income? Or consider those with whom you’d want to take care.
If you have any questions about selecting a beneficiary, contact us today!
A child under the age of majority cannot exert control over any money payable from an insurance policy. As such, you must name a trustee to keep the proceeds in trust until your children are of legal age. Make sure the person you choose is trustworthy and can rely on them to carry out your wishes. If your minor beneficiary is your child, you may wish to consider who would have custody of your child, should something happen you to when determining the trustee.
In Canada, there are two different types of beneficiaries:
As life evolves you should periodically verify that your named beneficiaries continue to reflect your intentions. A few of the most frequent causes for changing beneficiaries include:
For example, if you get divorced and remarry, you may wish to update your beneficiary to remove your previous spouse and add in the new one (if that is your desire!), since benefits will be paid to your first spouse instead unless you make this change.
To change a beneficiary, visit your online portal or complete a change form and submit a copy to your plan administrator.
Be sure to always complete the form in full. Any beneficiaries you’ve previously designated will be overwritten by this change request.
It’s a good idea to keep your completed form safe since it demonstrates the status of your beneficiaries, similar to your will and other important papers.
When naming your beneficiary, it’s critical to include all of the full names and relationships to you. If your beneficiary lives outside of Canada, adding contact information is also a good idea. It is also recommended to make sure your beneficiary matches the intentions in your will if that document speaks to the life insurance policy.
If you have any questions about beneficiaries or if you want to learn more about Core Benefits, please feel free to contact us today!