Canadians may have life insurance, pensions, group retirement services, and other savings to help protect our loved ones in the event that something happens to us. But do you know who is listed as your current beneficiary on these policies?
Many of us set the beneficiary designations when we initially enroll or sign up for retirement savings plans (RSP), group retirement services, and other programs, and then we tend to forget about them. We all encounter many changes throughout our lives and we need to be aware that these changes should be reflected in who we want as beneficiaries in the event something dire should happen.
It is a good rule of thumb to review your group RSP and pension for these designations whenever we have a “life event” such as a marriage, birth of a child, change of job, divorce or death in the family. Your group retirement service provider can help you review your policies.
Accounts that carry a beneficiary designation offer one of the simplest and most direct ways to efficiently get assets in the hands of loved ones after your death, but only if you have completed the paperwork properly and the information is up-to-date.
You might be surprised to learn that your will could have no authority here. Cases have been taken to court because parties who feel they should have been listed as the beneficiary were not. The insured person may have either forgotten to change, or just put off changing the beneficiary designation in their life insurance, pension, or group RSP.
Divorce seems to be the biggest trigger to court cases. The deceased forgot to amend their beneficiary when they remarried, and the new spouse is not listed. These designations are legal and binding, and are therefore very important to keep maintained and updated.
Take the time to look into you beneficiaries and contact your group retirement service provider today. Your loved ones will appreciate it!