Choose beneficiaries now to help prevent problems later
A beneficiary is the person or entity you designate to receive the proceeds (death benefit) from your life insurance policy, annuity or other financial contract, including your University of Texas UTSaver Plan. The beneficiary can be a family member, friend, trust, business organization or charity — and you can name one person, several people, or a combination of people and entities.
Designate both a “primary” and “contingent” beneficiary. That way, if the primary beneficiary dies before you do, your policy’s death benefit will be paid to the contingent beneficiary. Identify each beneficiary clearly, including Social Security number if applicable. This will help the insurance company or other financial institution locate your designated beneficiary and lessen the potential for disputes.
If you haven’t named a beneficiary or if there’s no record of who you selected, the death benefit will likely be paid directly to your estate. In that case, a lengthy probate process could delay distribution of the proceeds of your estate — and probate costs could reduce the amount of money you intended to go to your heirs.
Changes in your life situation (marriage, divorce, the birth or adoption of a child) may cause you to change your initial selection. Review your beneficiary designations regularly to make sure your choices are still appropriate and current.