Life Insurance Without a Beneficiary

(3 Minute Read)

There are a lot of questions surrounding your options if you are no longer with the person originally listed as a beneficiary on your life insurance—whether because they have passed or because you’ve made changes in your marital status. While the answer is sometimes as easy as making your child or children the beneficiaries of your policy, not everyone has children, which begs the question: what do you do if you don’t have a beneficiary?

Research Trusts and Non-profits
If you want your life insurance payout to go to someone other than a spouse or children, now would be a good time to begin researching how to create a trust in your name or to donate that money to a non-profit you support. What’s important here is evaluating with that non-profit how and where your money would be used. You can dictate this in many ways. Another possible option is to set up a scholarship fund in your name. Wherever you have a vested interest might be a good options. A financial advisor can assist you in setting up that giving opportunity.

Sell Your Life Insurance Policy for a Life Settlement
If you don’t have an organization or a beneficiary for your policy, you should reconsider whether you really need that policy. If you (and your trusted advisor) don’t have a good reason for keeping it, you may be a candidate for a life settlement. You can sell your policy for a sum of cash, and use that cash in other pursuits, whether to give to charity, or to build your nest egg. Use our calculator to see if you might be a good candidate for a life settlement.

Re-evaluate Your Potential Beneficiaries
The bottom line is that, once you own a life insurance policy, you can change your beneficiary if your spouse passes before you—to your children, an alma mater, a non-profit—but you aren’t limited to simply changing your beneficiary. If you’re paying a large premium and would rather not, you could get that money now and use it either for yourself or for anyone else. You have to make the decision as to whether or not you want to change your beneficiary or if you want to explore the life settlement market as an option to create immediate cash settlement.

 

LSA QCal

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