Beneficiary means the person whom the policyholder has appointed to receive the guaranteed death benefit of their life insurance policy.
It is the person who is entitled to receive the benefits of the policy. A beneficiary can be anyone who has a financial interest in your life. Banks, or other financial institutions, legal representatives can be the beneficiaries of your policy.
If you are buying a life insurance policy for yourself, then you have to appoint a beneficiary before your policy commences. You can choose more than one beneficiary.
Following or more information may be required for beneficiaries:
a) Name of the beneficiary
b) Phone number
d) Identity proof
You have to appoint a contingency beneficiary as well. In case your primary beneficiary dies before you, then your contingent beneficiary will receive the benefits.
You are most likely to buy a life insurance so that you can ensure that your family stays financially protected even after you are gone.
Though not mandatory but it is important to name a beneficiary to ensure that your money and your assets go to the person/persons who you want as the beneficiary is legally entitled to receive the benefit.
a) A beneficiary should be someone whom you can trust
b) You can appoint a minor as a beneficiary as well
c) Keep your beneficiary’s updated