From the WSJ(and I did my best to find a link to it for nonsubscribers - http://online.wsj.com/news/articles/SB1000142405270230384780...Cross-posting to Estate Planning and Inheritance Strategies.
I think the main message is to be careful to keep your beneficiaries up to date especially after any changes.But this can be trickier and more subtle than one might imagine. The company I retired from provides term life insurance for its retirees. They were acquired by another company two years ago.I just received notice that now that acquired company has been integrated into acquiring company, I need to enter my beneficiaries in their records. It was not automatic.I think this is lawyers taking no chances, keeping one set of records rather than transferring old data that may be out of date, etc., plus a reminder to bring those records up to date.But it is yet another detail of subtleties that can make your records obsolete.
>>>>I just received notice that now that acquired company has been integrated into acquiring company, I need to enter my beneficiaries in their records. It was not automatic.<<<<Your records would not necessary be obsolete.If the new insurance company showed no beneficiary then the death benefit would likely pass the terms of your will. Each state could be different.If your spouse was the bene and you were still married then the death benefit would go to him or her. However, the death benefit would be subject to probate and the attendant costs.Bottom line: Update beneficiaries and review.
You would think if a death occurred before the acquiring company's records were brought up to date, they would honor the beneficiaries designated previously.But it can get more complicated especially if the term insurance is under company contract and a new insurance company is now involved.
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