Luke simplifies the concept of a beneficiary in a life insurance policy and explains how multiple beneficiaries can be designated:
- A beneficiary is the person or entity you select to receive the money from your life insurance policy in the event of your death.
- Almost anyone can be chosen as a beneficiary, including your spouse, children, friends, charities, or even your estate. While some states and policies may impose limitations on beneficiary choices, most allow you to select whomever you wish.
- You’re not limited to choosing just one beneficiary; you can name multiple individuals, charities, or trusts as co-beneficiaries if you desire.
- An example is provided to illustrate how the proceeds from a life insurance policy are distributed among beneficiaries. If you have a $100,000 policy and designate your spouse as the sole beneficiary, the entire $100,000 goes to them. In a different scenario, if you name your spouse and child as equal co-beneficiaries, they would each receive $50,000 from the policy payout.
