When you first set up a structured settlement, you will be asked to select a beneficiary to receive your payments in the event of your death. Though it is often painful for most people to talk about the prospect of death, it is imperative that you take this question seriously.
If there are people who depend upon you, such as your spouse or children, you would typically want to make them your beneficiaries. However, over the course of a structured settlement, a lot can change in your life. These life changes may alter the makeup of who depends on you. When these changes do occur, you need to change your structured settlement beneficiary.
Why Is It Important to Name a Beneficiary?
When you name a beneficiary, you guarantee that your structured payments will go to the person or people you want them to go to. Otherwise, you are creating a mess for your loved ones when you die. Your death will likely be a hard time for those you love. However, there are steps you can take to make it easier for them.
One of those steps is having a plan for how those who depend upon you can continue to be financial stable. Part of that is making sure they are the beneficiaries of your structured settlement payments. With financials burdens off their shoulders for the short term, they can deal with grieving for your loss.
Reasons for Changing Your Beneficiary
In order to change your beneficiary, you usually do not need to give a reason. It is your money, and you can choose who receives the remainder of the balance when you pass on. The most common reasons for needing to change a beneficiary is marriage, having children, the death of a beneficiary, or divorce form a beneficiary.
The sooner you make changes to your beneficiary, the better. You do not want your money to end up in limbo or to have your loved ones fighting over the payments.
What You Need to Do
The terms of your specific structured settlement will dictate how you can change your beneficiary. Most insurance companies have the necessary steps and paperwork for changing the beneficiary on their website. If you do not have internet access, then call the insurance company that sends you your payments, and they will send you the forms that need to be filled out.
To change the beneficiary, you will likely need to tell the company
- Your Contract Number
- Your Full Name
- Your Date of Birth
- Your Social Security Number
In addition, you will need the full name, address, date of birth, and Social Security number of the new beneficiary.
You will also have to tell them what percentage of your structured settlement payments you want each beneficiary to receive. Always double check to make sure that these percentages add up to 100 percent. If they do not, your request to change beneficiaries will likely be denied. Filling out the paperwork incorrectly is the main reason for changes to be denied.