What is a beneficiary?
A beneficiary is the recipient of life insurance proceeds. It can be one or more individuals, a trust you’ve set up, a charity or your estate. Your policy should specify both “primary” and contingent, or alternate, beneficiaries: if your primary beneficiary is deceased or can’t be located, proceeds will go to the alternate beneficiary. To make locating a beneficiary easier, include the person’s whole name, address and social security number on your form. A clear designation will reduce the likelihood of squabbling among beneficiaries. Just in case, you should provide for how the proceeds should be distributed in the event that one or more beneficiaries can’t be found. Remember: life changes. Be sure to update the primary and contingent beneficiaries on your life insurance policy in case of marriage, death, divorce or the births of children.
(s) or other party(ies) designated to receive life insurance or annuity proceeds upon the death of the insured. The beneficiary is named when a policy is taken out and can be changed at the request of the policyowner. A contingent beneficiary is the party designated to receive life insurance policy proceeds if the primary beneficiary should die before the person whose life is insured. In order to change the beneficiary of a policy, the current policyowner must fill out a form with the necessary information and return it to the Service Center. • What is Income Tax Withholding? New York Life may be required to withhold Federal and sometimes State (depending on the state of record of the policyowner) income taxes from certain taxable distributions. Generally, payees are permitted to elect not to have income taxes withheld from designated distributions. • What is Taxable Gain? Under the tax law, certain distributions from life insurance policies result in taxable income to the policyowner.
