It is very common for people to want to provide for their child or children in the event they pass away. As such, you may be considering naming a minor child as a life insurance beneficiary. Here at The Smith Insurance Group Inc. serving the Sandy, UT. area, we want to help you decide if you should name a minor as a life insurance beneficiary. Here is some information you should know.
A Life Insurance Company Will Not Pay Out To a Minor
When you are deciding whether or not to list a minor as a life insurance beneficiary, it is important to note that a life insurance company will not pay out to a minor. If you list a minor as your beneficiary, the courts will appoint a guardian who will oversee the money left to them. In most cases, your child will be unable to receive the money until they are 18 or 21 years of age, depending on what the guardian decides.
Consider Setting Up a Trust or a Legal Arrangement
The best way to provide for a minor child in the event you pass is to set up a trust or legal arrangement. The trust or legal arrangement will detail who can access the money, such as a guardian providing for your child and when the child can access the money, such as for college expenses or as soon as your child graduates high school.
Purchasing a life insurance policy can help you to provide for your children if you pass out away at an early age. Are you looking to purchase a life insurance policy that will help you provide for your children even if you are not around? Contact The Smith Insurance Group Inc., serving Sandy, UT., to get started today.