Almost everyone has read Charles Dickens’ classic novel, “A Christmas Carol.” Even if you haven’t read the book, you probably know the story. Ebenezer Scrooge, a rich, miserly businessman, takes cruel pleasure in hoarding his money while his less fortunate employee, Bob Cratchit, struggles just to keep his family warm. But on Christmas Eve, Scrooge is visited by three ghosts, who convince him to change his ways. The following day, Scrooge, completely transformed, decides to spread love and joy to all his fellow men, beginning with his employee, Bob, and Bob’s invalid son, Tiny Tim. It’s a heartwarming tale of charity and redemption.
Not so many people know about the sequel.
“A Christmas Carol II” is much grimmer. It begins with Scrooge on his death bed. The old man, in his last act of giving, names Bob Cratchit as the beneficiary on his life insurance policy. Of course, the Cratchit family is happy to know that they will be taken care of for the rest of their lives, that the love and service they extended to Scrooge will be rewarded.
But then things take a drastic turn.
Bob suddenly dies of a lung ailment, the result of too many years working in the cold. Scrooge himself dies shortly after. And the worst of it?
All of Scrooge’s money goes to the government.
Why? Because Scrooge neglected to name a contingent beneficiary. A contingent beneficiary is a beneficiary specified by an insurance contract holder who will receive the benefits if the primary beneficiary has died at the time the benefit is to be paid.1 In the story, Scrooge had named Bob Cratchit as his primary beneficiary, but hadn’t thought to name a contingent beneficiary in the case of Bob’s death.
The result? The Cratchits’ lose their house and get left out in the cold. Tiny Tim develops pneumonia and dies, just like the Ghost of Christmas Present predicted.
After I read this gut-wrenching story, I immediately thought about you. I know how important it is that you make sure your family is provided for. That’s why I want to encourage you to name a contingent beneficiary; someone who stands to receive the benefits of your life insurance policy should something happen to your primary. If you have named your spouse as your primary beneficiary, consider naming your children to be your contingency. Or if you have named your children as your primary, consider your grandchildren as a contingency. The point is, make sure you take all the steps necessary in order to ensure your loved ones won’t be left out in the cold.
Please don’t delay. Give a thought to your friends and family and start thinking about naming a contingent beneficiary today. If you want to learn more about the process, or if you have any questions, please give my office a call at (719) 630-0600. I would be happy to talk to you.
