updated June 30, 2011


Our guest asks:

What does beneficiary information mean on the health insurance form? I don't understand this because we are not receiving any money. I have 2 children and there is a "primary" beneficiary. Confusing.

OnlineAdviser responds:

Commercial health insurance is essentially a contract to reimburse you for covered medical expenses that you might incur. You may assign this payment to a doctor or a hospital (as is the norm) or may designate a person to receive payments that may be made after your death. Since a large portion of an individual's total medical claims are incurred in the months just prior to death, this beneficiary issues is a much bigger issue than many younger people may realize. If you do not name a beneficiary then any posthumous claims are payable to your estate. Medical providers routinely collect their payments from the estate of a deceased patient, sometimes in an overly assertive manner. For this reason we generally advise naming a close individual or family member(s) as beneficiary of any life or health insurance policy.

You might use the phrase "children, equally" or put both names in the primary beneficiary line.

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