The policy owner (usually the insured) names the beneficiary on the application for life insurance. When the life insured dies, the beneficiary receives the death benefit of the policy.
In Snap, the beneficiary is split into the Estate of the client, Spouse, and Others. If you have enabled Charitable Donations in your scenario, a charity may also be selected as the beneficiary. Each of these parties can be assigned a percentage of the death benefit of the insurance policy.
If the Estate is the beneficiary, upon the death of the insured, the insurance proceeds are paid out to their estate.
If the Spouse is the beneficiary, upon the death of the insured, the insurance proceeds are paid out to the spouse of the insured.
Selecting the spouse as the beneficiary instead of the estate helps to avoid the probate fees and may make it easier for the spouse to access the insurance payout. In Snap, whether you select Estate or Spouse, mathematically the result will be the same as we do not factor in probate fees. Therefore, if the client dies and the estate is the beneficiary, the regular spousal rollover process takes place and moves the insurance payout along with the remaining assets of the client over to the spouse.
If Other is the beneficiary, upon the death of the insured, the insurance proceeds are paid out to beneficiaries other than the estate or the spouse. Other beneficiaries may include children or relatives for example. You may also assign a charity as the beneficiary.
Why might the Death Benefit display as $0 on the Planning page?
Since other beneficiaries are outside the clients' projections, the payout that would go to other beneficiaries is excluded from the clients' projections. This means the Death Benefit displayed on the Planning page will not include any percentage of the benefit for which Other is the beneficiary. For example, if Other is the only beneficiary (100%), the amount under the Death Benefit column for this insurance policy in the client's projections will be $0.