Life insurance claims can be tricky. You never know when you will be struck by a denial or delay, and sometimes, you may not even know why. They can range from simple things, like incorrect information on the life insurance application, to a deliberation on whether or not the death was within the adjusted timeframe, or if they died too early to be qualified under the life insurance policy.
While these are all quite disheartening to hear, if you are the policyholder attempting to set up a younger child as the beneficiary, there are even more qualifications and stipulations that must be taken into account. Here are just a few things that will need to be thought of and taken care of before most insurance companies will allow a child to be a beneficiary.
They must have a sort of custodian, or custodial account, for the minor
When age is a problem, it is usually due to the child being below the age of an adult, which that is usually 18-21, depending on the state. If they are below a certain age, it is important that a special account be set up in their name, so that the money can remain safe and untouched all the way through their years, until they are at the age of maturity, as deemed by the states. This is to help ensure that they will not make any rash decisions with the fortune they may have just acquired.
Using a Trust for a Minor
In some events, policyholders may wish to set up a trust fund for a child, in which the money is set aside and only released through the will of the policyholder at the time of death. This usually includes a trustee, such as a close friend or family member, who manages the benefits in place of you, until a specified date set by the policyholder. This way, the trustee will be able to make sure that the money is not tampered with, and can be used as the policyholder wished prior to their death.
Make sure everything aligns properly
When dealing with trusts, accounts, or other such things, make sure that each of these policies and contracts all align with each other. For instance, if you were to list one child as a beneficiary on the life insurance policy, but place someone else in your will as the beneficiary, there would be a clash, and the benefits that you deemed to actually go to the child may not be received properly, or on time. As such, make sure that an experienced member or attorney goes through your records, and helps to align all of the documents up with each other. This way, there are no faults, and there are no arguments over what you wished to be done with the money at hand.
If the age is listed incorrectly on the life insurance application, the claim will be denied, as there would have been a larger premium for a more advanced age, even a younger age.
If you have a denied life insurance claim, our experience life insurance lawyers will get you the full amount of the policy.