Life Insurance Beneficiaries ***
- Individuals (Primary, secondary, tertiary)
- Businesses
- Trusts
- Estates
- Minors (you must know the conditions)
MR. WATSON: The decision to name a beneficiary rests with whom? The policyowner.
MR. WATSON: Whenever one person buys a policy on another, the person buying the policy is called a third party applicant. Remember, insurable interest must exist between the applicant and the individual being insured.
MR. WATSON: Can an individual be a beneficiary?
ALL: Yes.
MR. WATSON: Can a business be a beneficiary?
ALL: Yes.
MR. WATSON: Can a trust be a beneficiary?
ALL: Yes.
MR. WATSON: A trust is a like a bucket with instructions taped to the side. When I die, I want my money to go into that bucket. I want the bucket to be my beneficiary. Then I name Cotton, my brother, to be trustee. He will administer the terms of that bucket according to the instructions taped to the bucket. while I'm in the grave.
MR. WATSON: Can an estate be a beneficiary? First, what is an estate? It's the total of your wealth. In this country we tax you when you earn it. We tax you when you buy something. We tax it as it grows. We tax you on your ability to give it away. It's called a death tax, a transfer tax, an estate tax. It's called all these things.