When purchasing a life insurance policy, you must designate a beneficiary who will receive the amount of savings upon the death of the subscriber. Care must be taken to clearly identify it in order to avoid any ambiguity. This is why there is a beneficiary clause.
If at the time of death there is a doubt about the identity of the beneficiary, the savings will be reinstated in the estate and will be subject to inheritance tax (which is not the case of the contract ‘ life insurance ).
It is up to the subscriber to choose his beneficiary. If it disappears before the subscriber, the beneficiary clause lapses and a new person will have to be appointed. You can also change the beneficiary throughout the life of the contract, unless the beneficiary clause has been accepted.
Indeed, the contract can work perfectly without the beneficiary being informed of its existence. However, the subscriber can decide to warn the latter that it appears on the life insurance contract. But beware, if the beneficiary accepts the beneficiary clause, there will be impacts on the life of the contract:
- The subscriber can no longer change the beneficiary without the agreement of the one already designated,
- the subscriber will no longer be able to freely choose the investments of his savings, the beneficiary will have his say.
So think carefully before you notify the beneficiary of the existence of the contract.
The Name Of The Beneficiary.
When choosing the beneficiary in the contract clause, it is important to choose the right words. Indeed, many insurers will offer you, for example, to write “my spouse” rather than designating him by name.
Indeed, in the event of divorce and remarriage, it will be the new spouse who will become the beneficiary, and not the ex-wife or the ex-husband.
Then, it is essential to provide second-tier beneficiaries such as: “My spouse or, failing that, my unborn children”, this would make the subscriber’s children beneficiary if the latter were to divorce and not remarry.
In any case, it is important to be well informed before drafting the life insurance contract in order to be prepared for all eventualities and to ensure that the subscriber can bequeath his savings to the people of his choice.