How Reasonable and Customary Limits Impact Your Group Benefits

When it comes to life insurance and accidental death & dismemberment (AD&D) benefits, one of the most important steps you can take is declaring your beneficiaries and keeping this information current. Here’s why it matters and how it impacts your loved ones: What is a Beneficiary? A beneficiary is the person or people you designate to receive the benefit amount, tax-free, in the event of your passing. What is a Contingent Beneficiary? A contingent beneficiary is the person or people you choose to receive the benefit amount if your primary beneficiaries are no longer living. What if I Designate a Minor Child as a Beneficiary? When naming a minor as a beneficiary, it is crucial to appoint a trustee to manage and protect the funds until the child reaches the age of majority. The Importance of Keeping Beneficiaries Updated Updating your beneficiary information regularly ensures that your life insurance and AD&D benefit amounts are directed to the correct individuals. Life circumstances—like marriage, divorce, or the birth of a child—can change over time, so it’s vital to review and adjust your beneficiary designations accordingly. The Impact of Not Declaring a Beneficiary If no beneficiary is declared, the proceeds from your life insurance claim will transfer to your estate. This can result in: Delays: Funds will only be distributed after the estate is settled, a process that could take months or even years. Reduced Payouts: Before your loved ones can receive any funds, the estate must settle debts, fees, and taxes. The Benefit of Declaring a Beneficiary If a beneficiary is declared, the proceeds will: Transfer directly to your listed beneficiary(ies) without delays. Be received as a tax-free payment, ensuring your loved ones have immediate financial support during a challenging time. Next Steps to Protect Your Loved Ones To ensure your benefits are distributed as intended, take the following steps: Download a new beneficiary form from your online portal or contact your plan administrator for instructions. Review and update your beneficiary information whenever there are significant life changes. Communicate your decisions to your beneficiaries so they are aware of your intentions.  Keeping your beneficiary designations current is a simple yet essential step in safeguarding your family’s financial future. Take a moment today to review your records and make any necessary updates.

Keeping your benefits information accurate and up to date with your provider is essential to ensure you and your family have access to the coverage you need. Missing or outdated information can lead to delays, penalties, or even declined claims. Here are a few key updates to remember: Family Changes : If you’ve had a life event—like a marriage, divorce, new child, or a child starting or finishing school—let your provider know within 31 days of the change. Spousal Coverage Adjustments : If your spouse’s benefits have changed (e.g., they’ve gained or lost coverage), this could affect how your claims are paid. Dependent Information : For children attending post-secondary school, ensure their enrollment status is updated with your provider to maintain their coverage. Failing to make timely updates may result in: Late Enrollment Penalties : You or your dependents might need to complete health questionnaires, risking coverage denial. Dental Coverage Limits : Late updates can limit dental benefits to as little as $125 during the first year, which may not cover even basic procedures.  Lastly, don’t forget to review your life insurance beneficiary details. If you’re naming minor children as beneficiaries, appointing a trustee ensures the funds are used as intended. Stay proactive—reach out to your benefits administrator or update your details online today to avoid any disruptions.