Jun 26
I want to name my underage children beneficiary of my term life insurance policy, but my life insurance agent recommended against this. Why?
Your life insurance agent is a smart man or woman. Why? Because naming your underage children as life insurance beneficiaries is not a smart move for a few reasons:
- The children will need that money now to take care of themselves, but does a 13 year old know how or what to do with this money?
- Even if the child is 18…would you feel that he/she was responsible enough to use this money in a beneficial way?
My recommendation is to put the death benefit in a trust. Trusts are often established and named beneficiary for children or heirs who have special needs or for the benefit of minor children who are not old enough to make legal or financial decisions. This way, you know that your children will have the money readily available to them if they need it.
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July 17th, 2007 at 9:24 am
Informative artcile…appreciated !!