Jun 22
DON’T name your under-age child as a life insurance beneficiary
Depending on the insurance company, the child might not get the money until they turn 18. But the fact is they’re going to need it when they’re young.
Also, minor children, when they are the named beneficiaries of a life insurance policy, should that policy end up paying a death claim before they grow up, might end up receiving a lot of money, a lot sooner (as early as age 18) than they have the maturity to know what to do with it. I’m not quite sure if I’d trust that my kids would use that money wisely. I’d be a little uneased.
For this reason, many people, rather than simply naming their children as beneficiaries or contingent beneficiaries, have set up trusts, to make sure that the money they have provided, through their life insurance, will be distributed more sensibly… on a schedule that they can predetermine using criteria that they have decided, in advance, that makes the most sense.
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June 26th, 2006 at 12:40 pm
why can’t life insurance be for life instead of until age 70 or 80?
June 26th, 2006 at 12:58 pm
It CAN be. Life insurance is available in many types, including the type that is for LIFE (permanent insurance such as whole life or universal life).