According to an online survey of 805 life insurance policyholders across the United States, the majority (70 percent) of them are confident their beneficiaries would know how to file a claim. In fact, most have taken proactive steps to help them prepare.
Peter Golato, SVP of Individual Protection for Nationwide Financial, pointed to Life Awareness Month as a good opportunity for policyholders to review their policy with their agent or adviser and beneficiaries. "Though most policyholders have done a good job of preparing their beneficiaries, there are some who need to take additional action to ensure their policies are kept updated so that, when the time comes, benefits due are paid in a timely manner," Golato said.
The survey found that one in five policyholders have not provided their insurer with up to date contact information for their beneficiaries. More than half (55 percent) of policyholders did not change their beneficiary after divorce. And 57 percent who have talked with their beneficiaries about the policy have not told beneficiaries where the policy is located.
"According to the survey, 75 percent of policyholders have not changed the beneficiaries designated on their policy and among those who did make changes, 77 percent did so five or more years ago," said Golato. The major catalysts for a change of beneficiary were getting married (30 percent), having a baby (21 percent), getting divorced (19 percent) and the death of a beneficiary (18 percent).
The top five reasons that policyholders purchased life insurance were: no particular reason (30 percent), started a new job (29 percent), got married (16 percent), had a baby (12 percent) and bought a house (10 percent).
