Naming a Beneficiary in Your Travel Insurance Policy
A beneficiary is a person who receives proceeds from the payout of an insurance policy in a qualifying event such as the death of the insured. When we’re talking about visitors travel insurance, the beneficiary is named in your policy as the person who will receive a payout as beneficiary.
The travel insurance provider cannot guess where you would like the money to go in-case of an emergency, so, you must name a beneficiary. In some cases, the amount to be paid can be substantial – up to hundreds of thousands of dollars, depending on the insurance plan you choose. If the insured fails to name a beneficiary, then the due funds could end up tangled in probate and may never serve the intended purpose of protecting loved ones in such a time of need.
Who Should I Name As My Beneficiary?
Your beneficiary should be someone you would like your benefits to go to in the case of an unforeseen event of death. Though, your travel companion is often someone close to you and may seem like the right person to name as your beneficiary, it is a good idea to additionally name a secondary beneficiary in case there is an accident in which both of you are involved. This way, you are assured that the benefits will be received by the party or parties you have designated in your insurance policy.
Failing to Name a Beneficiary is a Big Mistake
Without the specific designation of a beneficiary on your insurance policy, the benefits you’ve purchased will not go where you intended. If you do not name a beneficiary, the funds will go into the probate depending on the laws of your country. In most cases, this means a much reduced amount will reach your family once the proper legal actions are concluded.
Minors Don’t Qualify
Most visitors insurance plans don’t want a minor – that is, a person under the age of 18 – named as the beneficiary of any insurance policy. The reasons are varied, but essentially, it’s for the best interest of the child who would not be qualified to handle such a large sum of money. This same rule holds true for disabled people.
If you want to name a child as your beneficiary, and you have a legal trust established in the child’s name, you can name the trust as the beneficiary and the child will ultimately get the funds according to the terms of the trust.
It is recommended that you name the beneficiary, any person other than policy holders, insured persons or any traveling companions. The beneficiary can be any family member, son or daughter, relatives or friends.