As with all things in life these days, "the job isn't over until the paperwork is done", and this goes for your estate planning as well. You should look over and update your life insurance beneficiary whenever there is a life or family change.
Many people purchase products through work or privately, and find it to be a horrendous chore. Once it is done, they put it away with their will and other important documents, and then just forget about it. They make the monthly payments automatically, and forget to look at it once in awhile.
You need to update a beneficiary, and other documents, if you divorce, or your beneficiary dies before you do. These are all morbid thoughts, but also, if many years have passed since you took out this policy, then maybe your views on certain people may have changed. This is why you need to take it and your will out every few years, dust them off and update them and your will.
This Can Happen To You
Example: My brother became terminally ill with cancer last year. He was given, just a few weeks, but in those few weeks, he suddenly realized that none of his papers were in order. He was getting upset, and fretting. We had to get him out of the apartment in a frail condition to get to his safety deposit box, and haul out his life insurance papers. He didn't even have a will either.
So, he wanted everything done right, but with such little time and his health failing, we got back home only to see that the beneficiary stated on the policy was our dad, who had died 11 years ago!! He had never married, and just never thought to look at beneficiary. So, now he wanted to do that, and had to deal with the agent while not well.
Next was his will, we basically downloaded one off the internet, filled it out, and got him to sign it, and two neighbors in the hallway came in to witness it! I am sure they thought we were after his money or something, until we explained that we were his sisters. This may not have been the right way to do it, but his was a simple will.
Don't Wait Until It Is Too Late
Updating your insurance and your will, is really important. This should be looked at any time there is a change at all. My brother, David, spent a good week, frantically trying to deal with this and fretting, and he should not have had that upset when he was so ill.
He kept saying to us, make sure you update yours now. He was so worried about us having to pay for funeral bills etc, and he knew the insurance would help, so he wanted everything to go smoothly. We didn't even want to be thinking about this stuff but he did.
If he had died by accident or hit by lightning, his policy would have been in limbo, since it got left to a dead person, so that would have been hard to deal with, and no will would have meant nothing could be sold or dealt with until the government said so. So at this emotional time, we were helping him prepare his will and update his beneficiary.. not something we wanted to be doing at that time.
Have The Money Go To The Right Person
If you don't want your hard earned money and assets to go to the wrong people, then update your will. If you have a life insurance policy through work or one you pay for on your own, make sure you leave it to the right person, and if you have to update it from time to time, do it, or your last wishes may not be carried out as you would have liked them to be.
After my brother died, I opened up our papers, and they were still going to the right beneficiary, but our will had our son as guardian of his sister. They are now 28 and 26, so this needs to be changed.. Our lawyer suggested, that everyone look at their insurance and wills every 3 - 5 years and make sure everything is the same.
No One Plans To Die
Plus look at your situation, if you die and there is a huge financial hole, maybe look at raising the amount of your insurance payout while it is in effect. Update a life insurance beneficiary and your will today. Nobody plans to die, but we all do eventually, some earlier than others, so it makes good financial practice to leave the last chore that your family will have to deal with updated and correct.