Assigning beneficiaries is the easiest part of life insurance enrollment, right? Wrong. Employees often make mistakes when designating beneficiaries, which can lead to misunderstandings or financial difficulties for their families during already stressful times.
One of the most common mistakes is not updating beneficiary designations when life circumstances change. As part of your outreach during Life Insurance Awareness Month this September, encourage clients to remind employees about life changes that could prompt a beneficiary review. Marriage, divorce, births or adoptions are examples of milestones that often spur beneficiary changes.
As stewards of their employee benefits plans, remind your clients to prompt employees about beneficiary reviews — at least once every two years— to ensure employees' wishes are carried out when life insurance proceeds are distributed. Here are potential consequences if your clients don't properly update their beneficiary designations:
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