Can Minor Children be Beneficiaries of Life Insurance?

When most people are buying life insurance they are thinking about protecting their family and that includes children in most cases. The matter comes to light if you happen to pass on before your children are of age. So the question of whether or not you can leave a portion or the whole of your life insurance to your minor children becomes an issue. This is something that a good many people are not familiar with and can cause a certain amount of confusion when it comes to this matter.
There are several legal matters when it comes to leaving life insurance money to the minor children. The first matter for the question is who else will be involved in the transaction. Obviously a minor child that is too young will not be able to understand the matters that need to be resolved. Whenever there is a payout from a life insurance policy there is some paperwork that needs to be filled out as well as documentation that needs to be provided. In this case there is the need for the minor child to be represented by an adult party.
When you determine to leave the life insurance policy to a minor child then you will need to set aside a person who will be the child s representative for all of the financial matters. In many cases people will name a lawyer as the representative but there is the matter of it becoming very costly. If there is a particular family member outside of the immediate that you trust then may want to consider naming them the guardian in this case.
In most cases the person that is purchasing the policy will also set a monetary amount for the person representing the child. This is a way of making it more appealing for the person that is having to do all of the work if the need arises for the policy to be collected on. This does not have to be a large amount but just a small portion of the life insurance policy as a gesture.
Then you must consider how you want the minor child to receive the money from the life insurance policy. Most people are leery of allowing a minor to have access to a large sum of money all at once. That is where a trust comes into play. If you want to make sure that the child is cared for over a long period of time then you can set the life insurance policy so a trust is formed with the payout and the child will have access to only a set amount over a period of time.
Read more at the EFinancial ELearning Center



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