When people buy a new life insurance policy, they typically name their beneficiary right away and put the document away until the document is needed again. John P. Napolitano, business columnist for Massachusetts' Patriot Ledger, said people may benefit from taking a second look at their policy.
"Assets that should have a current beneficiary designation include any life policies, annuities, employee benefits and retirement plans such as 401(k)s," he said. "The selection is important because whomever is named as your beneficiary receives the assets upon your death, without regard to what your will says. If your will states that your children shall receive your life insurance after you die, and then you change the beneficiary of your life policy to your new spouse, the kids lose."
In one tip, he said it may not be a good idea to put all of the money in the hands of a young child if the situation changes, so people should take a look at their policy and make sure everything is in line at least once a year.
The National Association of Insurance Commissioners said it is important in general to review term life insurance and other forms, as there could be changes in the policy or in life over the years. People should take the time to give the policy a look to make sure everything works.