Q: Can I Name My Children The Beneficiary On My Life Insurance?
It is generally not advisable to list children as the beneficiary whether they are primary or secondary. The reason is that once they reach age 18 they would receive whatever lump sum of benefits were remaining from the death benefit and many advisers, including Dave, do not recommend providing a child with large sums of money at these early ages. You can avoid this situation by setting up a trust within your will. This is typically referred to as a testamentary trust and does not add much cost since the trust is not actually established until your death. You are just directing the executor of your estate to do so and set certain limitations on how the monies can be used.