4. Not Having Succession Owner
A big mistake people tend to make is not recognizing that life insurance is an asset. If the owner and insured on a life insurance policy are two different people and the owner dies first, the policy ownership has to pass to a successor owner. If the policy owner did not name a successor owner, the policy will be subject to probate.
Probate can cause the policy to be subject to creditors’ claims and unnecessary costs. It can also cause ownership of the policy to pass to an unintended owner or to be divided among multiple owners. Make sure that if your policy has different insured and owner, either name at least one successor owner or have an entity such as a trust own the policy.
Next mistake to avoid - estate as beneficiary.