What Is a Beneficiary (And 4 Reasons You Need to Create a Will Today)
Planning everything in advance will leave less room for unforeseen surprises. You never know what will happen a day, week, or year from now. That’s why it’s particularly important to sort out your future before it’s too late.
When you’re in peak condition, you don’t think about the worst too often. However, it’s never the wrong time to think about your family’s long-term financial security. And it applies even if you feel like you’re going to live a long and fulfilling life.
You have a family to provide for. They love you and they rely on you to be well at all times. But what if that’s no longer possible? You need to do everything possible to help secure their future if you were no longer around.
A life insurance policy can provide you with long-term peace of mind in this respect. It can allow your loved ones to get over their loss and move on with their lives without the added burden of financial pressure.
However, there’s another important thing here:
You need to be sure where your money and assets will go and you can also takes steps to determine how some or all of it will be used.
Let’s dive in and explore a little more.
What Is the Beneficiary of a Will?
A will is a document that determines the distribution of your wealth following your death. You get to prepare the will, of course, so you’ll know where your money and your assets end up when you pass away.
You can make a will at any point in your life. However, many people choose to create it at the same time they buy life insurance.
If you choose to leave a portion of your assets to one person in your will, that person becomes a beneficiary. The person doesn’t have to know that he or she is a beneficiary until you pass away.
You can, of course, have multiple beneficiaries. In the event of your death, the legal executor of the will should contact them and notify them about the situation.
Typically, your will is a good way to distribute your life insurance payout too. If you’ve decided to leave a sum of money for your child’s future education, you can state that in your will. If the will is drafted correctly, nobody will then be able to use that money for any other purpose. It’s all up to you.
Overall, you should consider creating a will as soon as possible. And here are some of the most crucial reasons to do so.
Reason #1 – You Have Control of Your Wealth’s Distribution
Even after sorting out your life insurance policy, some questions will continue to loom. Your family may receive a lump sum payout, but what happens with that money?
Imagine that you have a detailed plan for your family’s future. For example, you wanted to leave a portion of the money for your child to start a business. Or, maybe you wanted to pay off a big chunk of the mortgage.
But if you’re suddenly gone, your family may not know about these plans. Additionally, it’s hard to manage money in times of emotional distress.
There’s a chance they will end up using the money for other reasons other than what you intended it for.
Reason #2 – You Can Secure the Future of Your Children
When you think of the worst outcome, you rarely think about yourself. Instead, you worry about the future of your children.
Who will provide for them?
Who will secure their education?
A will can help sorts out some of these things for you. You can designate the exact sum that you want to leave to your children. On top of that, you can specify to which cause they’re to spend it.
But that’s not all. A will allows you to designate a guardian if you have minor children. In choosing the right guardian, you have a degree of control over the environment in which they’d grow up even if you’re not there anymore. Your designated guardian will be in charge.
Reason #3 – Avoiding Family Conflict
You’ve heard it a dozen times before. A wealthy family member dies and this pits the entire family in a difficult discussion. Distant relatives suddenly appear looking for their piece of the pie. Brothers and sisters become excommunicated.
Who gets the inheritance?
Everyone will fight for what they think should be theirs.
But there’s a simple way to help avoid this.
A will can reduce this conflict to a minimum. You can clearly specify who gets what and why. And everyone can go on their way in harmony… Hopefully.
The Final Piece of the Puzzle
When you decide to sort out this part of your future, here are two of the important things to consider.
First, getting a suitable life insurance policy that meets your particular needs is important. And then, you should consider speaking with a lawyer to formulate a will to help secure your family’s future if anything ever happens to you.
Having the correct insurance and a will in place helps ensure that your loved ones will remain financially secure… Even if you’re not around to witness it.
But first, it’s time to get a quality life insurance policy. And NobleOak can answer the call.
At NobleOak, we care about your future and offer a range of life insurance covers for you to consider. With over 140 years of experience, we seek to provide a range of quality life insurance products to Australians.
Get a quote on our website and we’ll get back to you as soon as possible.