You have probably taken out a life insurance policy, such as pension savings insurance or investment insurance. In it you have designated a beneficiary. Do you remember who that beneficiary is? And does this still match your wishes today?
The benefit explained in more detail
When taking out a life insurance policy, you have the option of designating a beneficiary in the event of death according to your personal preference. This person will receive the capital of your life insurance policy in the event of your death.
You can choose to indicate one beneficiary as well as several beneficiaries. With several beneficiaries you can choose the order so that the beneficiary receives the capital in full in first rank. If this first beneficiary is deceased, the amount will accrue to the beneficiary in second rank.
You as the telemarketed final expense leads company or policyholder can always change the designation of the beneficiary. However, once the beneficiary has accepted the beneficiary, the consent of this accepting beneficiary is required.
The wording of the favoritism clause is also essential to avoid subsequent discussions. Life insurance policies are therefore better reviewed when life circumstances change, eg a breakup with your partner or the birth of a child. Forgetting to change your favorit can have important consequences …
What types of benefits can you opt for?
First, you can designate a beneficiary in a general manner, by indicating all persons who have the indicated capacity (examples: ‘the children of the policyholder’, ‘the spouse of the policyholder’, ‘the the policyholder’s brothers and sisters’, etc.)
In addition, you can designate a beneficiary in a nominative manner, by indicating one or more persons by name (for example: “his son Lowie”).
You could assume that the effect of both types is the same. But in reality this is not always the case and the effect can have far-reaching consequences, as shown below.
Elaboration with regard to an ex-spouse
Suppose you have taken out a pension savings insurance policy in which your spouse is designated as the beneficiary of the death benefit. However, you split up and the beneficiary clause is not amended. You will die a few years later. Will your ex receive the saved capital?
A distinction must be made according to whether or not your spouse was nominated (by name).
The designation is nominative
When the marriage comes to an end, all marital benefits that spouses have over each other cease. Your ex-spouse will no longer be entitled to the capital of your life insurance policy after the divorce, even if you forgot to adjust the beneficiary clause of your life insurance policy. Legal doctrine assumes that the nominative ex-spouse loses her rights after a divorce, unless the policy was taken out before the marriage was entered into. In the latter case, the capital will be paid to the ex upon death.
Please note: this rule does not apply to cohabitants (both factual and legal). If you had indicated your cohabiting partner by name in your life insurance policy, it is best to amend the beneficiary clause after a breakup. If you do not do this, your ex-partner can still claim the death benefit upon your death.
The designation is general
In that case, the effect will vary depending on whether or not you remarry.
- You remarry: your new spouse becomes the beneficiary.
- You do not remarry: the beneficiary in second rank (e.g the children) receives the capital of your life insurance. If you have not designated a second beneficiary, the capital will be distributed to your estate.
Effect on children
The indication of children is at least as important as the indication of your spouse or partner. Again there are two possibilities, where the consequences of the premature death of one of the children are different:
Either you indicate your children by name. If one of your beneficiary children is pre-past, the capital will be divided among the other beneficiaries and the substitution mechanism (where grandchildren instead of the predeceased child) will not automatically apply.
You can also indicate your children by capacity, eg “the children”. If a beneficiary child has a prior history, it will be his own heirs in a straight line (that is, the grandchildren), who are entitled to the capital to be distributed. The mechanism of place fulfilment will be discussed here.
The aforementioned distinction is also important for the birth of a new child. In the first case, the new child will not be a beneficiary (because not mentioned by name) while