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Updating your life insurance beneficiary is one of those tasks you always mean to do but always put off, like cleaning out your junk drawer or matching up your mate-less socks. Failure to do these tasks will have consequences, but nothing dire.
The consequences are higher, however, if an employee doesn’t take the time to review/update their life insurance beneficiary. Without the right beneficiary, sad situations can occur. A second wife may not have the necessary funds to care for her children because the first wife was still listed on her husband’s beneficiary information. A husband learns his wife forgot to update her beneficiary after they got married and the benefit went to her sister instead.
Taking the time to review and update this information ensures that the employee’s wishes are fulfilled and that legal complications are avoided. Here are three easy ways to remind your employees to review:
- During your open enrollment period, make sure to include this information sheet and beneficiary form in their packet of materials.
- Send out a quick reminder email annually (about six months after your annual open enrollment date) with this information sheet and your insurance carrier’s beneficiary form.
- When an employee contacts you about a benefit change, it’s usually prompted by a life event (birth, adoption, marriage, death in the family, and divorce/annulment). This is a good time to have the employee update their beneficiary information if necessary. Have the information sheet and beneficiary form on hand for them.