What Is A Beneficiary For Health Insurance?
A beneficiary for health insurance is a person or entity that is entitled to receive benefits from an insurance policy in case of the policyholder’s death or disability. The beneficiary is essentially the designated recipient of the insurance company’s payment in the event of the insured’s death or in some cases disability.
Types of Beneficiaries
There are different types of beneficiaries that one can designate when purchasing health insurance. The most common types include:
Primary beneficiaries are the first in line to receive any benefits that the insurance policy provides upon the policyholder’s death or disability. Most people typically name their spouses or children as their primary beneficiaries.
A contingent beneficiary is the person or entity that receives benefits in the event that the primary beneficiary dies or is unable to receive the benefits. For example if you name your spouse as your primary beneficiary you may choose to name your children as contingent beneficiaries.
Naming a Beneficiary
When purchasing health insurance it is essential to name a beneficiary to ensure that your benefits will go to someone you trust in the event of your death or disability. Beneficiary designations are typically made when the policy is purchased or as an update to an existing policy.
To name a beneficiary you will usually need to provide the person’s name address date of birth a social security number. Some insurance companies may require additional information such as a driver’s license number to ensure that the beneficiary’s identity is verified.
Updating Your Beneficiary
It is essential to review update your beneficiary information regularly especially after significant life events such as marriage divorce or the birth of a child. You may also want to update your beneficiary information if your primary beneficiary passes away or you want to designate a new person or entity to receive your benefits.
The Bottom Line
Naming a beneficiary for health insurance is a crucial step in ensuring that your loved ones receive the benefits they are entitled to in the event of your death or disability. Make sure to review update your beneficiary information regularly to ensure that your benefits go to the appropriate person or entity.
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