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Why Updating Your Beneficiaries is Critical

Female staff member with spouse, children and parents.

By setting funds aside, you’ve already taken steps to provide financial security for your loved ones in the case of your death, but one step most often neglected is designating a beneficiary.

Your beneficiary is the person to whom your benefits are paid in the event of your death. There have been many cases where family members don’t receive the life insurance or retirement savings payouts promised to them by their deceased loved ones, simply because the beneficiaries weren't designated initially, or updated as life circumstances changed.

For peace of mind, make sure you have up-to-date beneficiaries, familiarize yourself with what happens if you do not name a beneficiary, and identify any action steps you need to take.  An ideal time to “take inventory” of your beneficiary designations is during the annual benefits Open Enrollment period in the fall. A good rule of thumb however, is to update your beneficiaries during a life event, such as a marriage, birth or death. You can update your beneficiary by following the instructions below.

Life Insurance, Accidental Death & Dismemberment (AD&D) and Business Travel Accident Insurance

As a Stanford employee, you are automatically enrolled in basic term life and business travel accident insurance at no charge. Additionally, you have the option to elect supplemental life and AD&D. If you die without naming a beneficiary, your insurance will be payable to the first of the following: your (a) surviving spouse or Registered Domestic Partner; (b) surviving child(ren) in equal shares; (c) surviving parents in equal shares; (d) surviving siblings in equal shares; (e) estate. Log into My Benefits to review and change your current beneficiaries, located in the My Profile section, or call the University HR Service Team for assistance.

Retirement Savings

Stanford offers you the Stanford Contributory Retirement Plan to help save for retirement. Federal and California laws guarantee certain beneficiary rights to spouses for this type of benefit. To designate beneficiaries of your Fidelity investments, log into the My Retirement Savings portal, then click Profile from the Menu to check your current beneficiaries. You may also call Fidelity at 888-793-8733 for assistance. If you have TIAA investments, contact them directly at TIAA.org or 800-842-2252. You may wish to consult your legal advisor about the effects of naming or not naming a beneficiary and/or to ask about creating a trust, which can be used as a designated beneficiary.

Health Savings Account

A Health Savings Account (HSA) is an account that works in conjunction with the Healthcare + Savings Plan (high deductible health plan). The account allows you to put money aside and reimburse yourself for medical expenses on a tax-deductible basis. Unspent funds accumulate tax-free and roll over from year-to-year. If you die, the account will pass to your beneficiary. If there is no beneficiary designated, the account becomes part of your estate. Log into the HealthEquity portal then use the “Add Individuals” tool to update your beneficiaries. You may also contact HealthEquity any hour of the day at 877-857-6810 to add a beneficiary over the phone.

Categories: 
Benefits & Rewards, Health, Retirement