Who should the money go to?

Whilst in principle you can have the benefits from a life insurance plan you have taken out on your own life payable to pretty much anyone, most people tend to want the beneficiaries to be their husband, wife or a dependent partner or relative.

Life insurance plans can be set up on a 'life-of-another' basis, however, you must be able to prove an insurable interest between the person whose life is to be covered (the life assured) and the policy owner who would benefit from the plan proceeds in the event of the life assured's death. This helps to prevent people taking out life insurance plans on other people in the hope that they might gain financially from the death of a non related 3rd party. Insurable interest is automatic for spouses and civil partners but may be more difficult to prove if someone other than this was to be the policy owner.

If you are considering assuring your own and your spouses (or a dependent partners life) at the same time, a joint-life policy is a popular choice and will mean that unless stated otherwise, the beneficiary of a joint plan is most likely to be the surviving joint owner of the policy. However, this is not always the cheapest option or the most efficient way of meeting a couples life insurance needs.

Next: Who should the money go to? (continued)

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