The ownership of your Life Insurance policy is a very important consideration.
If you are the sole owner of your Life Insurance policy you will possibly be adding further stress to an already difficult time for your family.
If you’re single then it’s most likely you own your policy solely in your own name. If you were to die, the insurance company is looking for the policy owner to pay the proceeds to, however, you’re now dead so there are laws which come into play to govern how the proceeds are divided.
Firstly, someone will have to be appointed as executor of your estate; if you have a will the executor will have been recorded in it and they will have to go through the probate process to determine who gets the proceeds of the Life Insurance policy. This can take up to 6 months to get the court’s approval.
Meaning your family will most likely have to pay for your funeral out of their own funds and be reimbursed later.
Putting the ownership of the policy in your parents names can avoid this problem. The ownership can be changed to someone else later on when your circumstances change.
If you’re married or in a de-facto relationship you might have already owned a Life Insurance policy before you met that person and never got round to changing the ownership to a jointly held basis.
You’re wanting the proceeds of the Life Insurance policy to go to your spouse to clear a mortgage, pay for the funeral and look after the children (if any) in which case the same problem arises. The owner is now dead and the court process of probate has to occur before the funds can be released.
Incurring costs and delay!
Changing the ownership of an existing Life Insurance policy is a simple exercise and will ensure the right people/person gets the money according to your wishes.
Changing ownership costs nothing if you still have the original policy document.
If you’re taking out a new Life Insurance policy make sure you consider the ownership issue to save your family unnecessary emotional stress.
A quick call (or email) to Acorn will give you peace of mind that if the worst happens your family won’t miss out or be inconvenienced – Life Insurance is supposed to provide ‘Peace of Mind’ after all.