When it comes to designating beneficiaries in your life insurance policy, you may come across the term ‘per stirpes’. This term is used to specify that the death benefit should be passed down to grandchildren if the listed child beneficiary is no longer alive. Let’s take a closer look at what ‘per stirpes’ means:
| Term | Meaning |
|---|---|
| Per Stirpes | ‘By root’, specifies that grandchildren can receive death benefit if the child beneficiary is deceased. |
| Per Capita | Specifies that the death benefit should be split equally among listed heirs. |
It’s important to note that ‘per stirpes’ only applies to grandchildren and cannot be used to designate beneficiaries that are not your grandchildren. If you prefer an equal split of the death benefit among listed heirs, then ‘per capita’ would be the appropriate term to use.
When deciding on a beneficiary for your life insurance policy, it’s important to understand the legal terms used by your insurance company. If you’re unsure about any of the terms, talk to your insurance agent or a legal expert for clarification. They can also help you decide who to use as your life insurance beneficiaries if you aren’t sure.
Understanding the terms used in your life insurance policy is crucial, so you know exactly what you’re getting. With this knowledge, you can make an informed decision and ensure that your beneficiaries are designated correctly.
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Article Sources
- OPM (Office of Personnel Management). What Is A Per Stirpes Designation? Can I Use One When ... - Opm
- Investopedia. Per Stirpes: Meaning And Uses In Estate Planning
- Policygenius. Per Stirpes Vs. Per Capita Death Benefit
- Life Ant. What Does "Per Stirpes" Mean For Life Insurance?
- Protective Life Corporation. Life Insurance Proceeds