Life insurance is the financial legacy you plan to leave behind following your death. It can help your loved ones ease their personal burdens with a financial payout it provides. Therefore, as your family grows, how you want to use your policy might change. After your marriage, you might want your spouse to have benefits provided by your policy.
However, at times, even your spouse might not seem like the right person to name as the policy’s beneficiary. Yet, how do you decide whether to name them?
A Spouse's Death Responsibilities
Life insurance can help your survivors recover some of the income that might disappear with your death. However, everyone has different priorities for their financial future. You might have plans in your own mind that you want the money to go toward.
The thing about life insurance is that you have few requirements to leave it to a specific person. However, you do have to name a party that you want to receive the policy’s payout. This is your beneficiary. In most cases, it is completely natural to want your spouse to be the policy’s main recipient.
Usually, unless you have a Will that distributes your assets, a spouse automatically inherits at least a percentage of your estate. Therefore, they will assume a lot of the costs you leave behind. This includes things like a mortgage, childcare costs and other debt. A payout from your life insurance can help them pay down some of these burdens.
Deciding Not to Leave a Spouse Money
Once you leave money to your spouse, they often have free reign to use it as they choose. It doesn't have to go to the purposes you intended. So, if you want further control over the use of your money, you might have to take further steps.
For more control, you can establish a trust fund, which becomes the beneficiary. Therefore, the trust will govern the use of the money. For example, if you want this money to fund the mortgage, then you can set up the trust to get the money where it needs to go. Your spouse will then be able to use it for that specific need, only.
There might be plenty of reasons you decide not to leave money to a spouse. For example, you usually should not leave the money to a partner to whom you are not legally married. Nor should you leave the money to a spouse you are divorcing. Still, spouses in stable relationships can often enjoy the help your life insurance provides.
Looking for life insurance? Talk to a Mayflower Insurance agent today by calling 877-400-0500. We can help you find coverage to protect your family.
Also Read: Why You Should Get Life Insurance Before a Child's Birth