Many people take out a life insurance policy to ensure their children are cared for in the event that they pass away unexpectedly. However, one of the questions that people often ask us at Insurance Pro Group Inc., serving the greater Suwanee, GA area, is whether minors can be life insurance beneficiaries. Here is what you need to know about this topic.
Life Insurance Beneficiaries
Minors can be named as a beneficiary on a life insurance policy. However, minor children typically cannot receive the money from the life insurance policy if it pays out while they are still a minor. If you pass away and the child is underage, the money typically is held in an account until the child reaches either 18 or 21, depending on the terms of the policy and the age of majority in the state in which the policy is signed in.
If you are concerned about your child being taken care of until they reach the age of majority where they receive the money, you can set the policy up so that it has a Uniform Transforms to a Minor clause in it. The money is transferred to the individual who cares for your child to spend on your child’s needs. Once your child reaches the age of majority, they transfer the remaining balance to your child. Unfortunately, no one oversees these policies, so the money needs to go to someone you trust to spend the money responsibly on your child.
If you are looking to take out a life insurance policy in the greater Suwanee, GA area, Insurance Pro Group Inc. can help you. Contact us today to talk to one of our agents about your life insurance needs or to obtain a quote.