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February 24, 2021

Updating Your Beneficiaries and Why It Matters

By Crista Murray, Alliance Benefits

Do you know who your beneficiaries are? With Alliance Benefits, this includes any life insurance, health savings account (HSA), or 403(b) retirement account you have. For many people, naming beneficiaries happens when first setting up the account or policy. However, when life changes occur (birth, marriage, death, etc.), you may find that your designated beneficiaries are not who you thought or intended them to be.

Three reasons to name a beneficiary

1. It eliminates confusion. Having a current beneficiary on all your accounts, you leave no doubt about what you wish to be done with your hard-earned money or insurance proceeds.

2. It saves time. If you die and have not named a beneficiary, this will delay the transfer of whatever funds are in those accounts. In some instances, the delay could be significant and require that the person in charge of your affairs or estate complete a lot of paperwork to make it happen. If there are final expenses to be taken care of, the impact could be significant.

3. It helps ensure the financial wellness of your loved ones. This is particularly important for life insurance, where the primary purpose is to provide money for a particular purpose, such as helping cover funeral expenses or replacing income.

Why is it essential to update your information?

Did you know that a designated beneficiary form will take precedence over any other form of legal documentation? This includes decrees, wills, trusts, and any other formal legal document. It doesn’t matter which document is more recent; the beneficiary form will always hold authority over any records.

If there are no active beneficiaries on file, your assets may be transferred to your estate, and the state law then determines who receives the money. In other cases, the presumption is that the heirs named in your will should receive the proceeds, but this could be challenged as beneficiary designations may supersede your will.

How frequently should beneficiaries be updated?

It is important to review your beneficiaries periodically, especially if there have been any changes since you first established your account or policy. This also applies if you previously named a charity or trust as your beneficiary and it no longer exists. A great time to review your information is annually, such as when you file your taxes.

If beneficiaries are not regularly updated, accounts could end up in the wrong hands, leaving the unspecified intended beneficiary with little legal recourse. An example would be if children are named as beneficiaries, but legal documents are never updated to include those born after the initial designation.

How do I access my beneficiary information?

For accounts or policies with Alliance Benefits, here are some simple instructions on how to designate, view or update your beneficiary information:

403(b) Alliance Retirement Account Visit Empower Retirement’s website → Log in → Go to My Accounts → Click on Beneficiaries

Alliance Health Plan Health Savings Account (HSA) Visit Lively’s website → Log in → Select Account Settings from the menu optionClick on Beneficiaries

Alliance Health Plan Basic and Voluntary Life Insurance On the Alliance Benefits Change Form → Complete the General and Life Insurance Beneficiary Designee Change sections → Sign and submit

The Alliance Benefits Team is here to help with any questions you have along the way. Feel free to contact us by calling (800) 700-2651 or emailing benefits@cmalliance.org.

Crista Murray joined Alliance Benefits in June 2009 and has been with The Christian and Missionary Alliance for over twenty years. She is responsible for overseeing and coordinating the day-to-day execution of marketing strategies and communication efforts for both the health and retirement plans.


Posted in: 403(b) Plan Tools, Health Plan Tools