Life insurance is a good idea, especially when you have children. It is important to have some finances to help take care of your children after you are gone. However, if you name minors on a life insurance policy, the minors cannot legally sign the policy. Until they are old enough to sign the policy, another adult has to sign as a witness. There are some other precautionary measures you should take when you name your children as beneficiaries of your life insurance.
Write This into Your Will
Even though you have already named your children as life insurance beneficiaries, you should also put this in your will. It serves to show that you did indeed name your children to inherit the money from your policy, and no one else. The will, as a legal document, backs up what you have written in the insurance policy.
Name Guardians for the Children
In the event that you should pass away before your children are adults, you should name a guardian or guardians that you can trust. Whomever you name as guardian will be responsible for using the life insurance money to raise and care for your children. You want to be sure that the money from the insurance will not be spent on anything other than your children and their needs. (You also want to be sure that the guardian does not receive the remainder of any life insurance money in the event that your children pass away as well, so choose very wisely.)
Protect the Life Insurance Money from Probate
Money granted from your insurance policy can be seized by creditors and held in probate for years. You need to prevent this action by securing the money against probate. There are some ways to accomplish this legally, but you will need to consult with a lawyer prior to your passing. A wills and trusts lawyer can help fill you in on the details of these protective measures.
Do Not Name Adults as Beneficiaries If You Want the Kids to Get the Money
There are opportunities on your life insurance policy to name several beneficiaries. If you definitely want the money to go to the kids, do not name any adults as beneficiaries on the policy, even if they do not have a chance to inherit the money after the kids pass away unexpectedly or pass away with you. This protects you, the kids' future, and prevents unpleasant situations from arising.