3rd Quarter 2008
Emphasize Accurate Beneficiary Designation
Annual enrollments are coming up for many of your customers. It makes sense for you as an advisor to remind plan administrators to emphasize the need for employees to make good beneficiary designations. Most plans allow employees to make changes to their beneficiary designations for Group Life insurance and employer-sponsored retirement plans any time during the year.
What Makes a Good Designation?
Good beneficiary designations are clear and specific. Designating “my son” as beneficiary is not nearly as good as “my son John Jacob Smith.” Employees should:
- Give each beneficiary’s full name;
- Specify their relationship to the beneficiary;
- Specify what percentage of the benefit each beneficiary should receive, if multiple beneficiaries are named; and
- Sign and date their designations.
Why Are Designations Important?
No one wants a family that has lost a loved one to have to wait any longer than necessary to receive a Group Life insurance benefit. Waiting for the benefit to be paid can be stressful, both for the family and for the benefits manager at the group who takes the calls of the bereaved relatives. Knowing clearly and specifically to whom the benefit should be paid can help speed up the claim process and benefit payment.
Getting beneficiary designations right is one of those little details that a lot of policyholders don’t really think about until after a problem occurs. Ask your in force Group Life carriers and retirement plan providers to help your customers save themselves potential headaches down the road by taking the opportunity to get their beneficiary designations in order this open enrollment season.