Beneficiaries to Life Insurance Policies

Learn About Beneficiaries to Life Insurance
Policies and How It Works


Naming the beneficiary of a life insurance policy is an important decision that requires careful thought.

The beneficiary of a life insurance policy receives the death benefit proceeds of the insurance policy in the event you die.

It’s important to take your time in choosing your beneficiary. But, remember that you may be able to change the beneficiary in the future if you choose.


Guide to Naming Beneficiaries to Life Insurance Policies

  • Defines what a life insurance beneficiary is.
  • Explains things to consider when naming your beneficiary.


Your Life Insurance Beneficiary

Your beneficiary receives the proceeds of your life insurance policy upon your death. The beneficiary you name may be a person, your estate or a business or organization.

When you select a beneficiary, you should provide the complete name of the person and state clearly the amount or percentage of the proceeds the person is to receive from your life insurance policy.

Some states do have restrictions as to who may be named your beneficiary on a life insurance policy. There are states that require you leave the proceeds to a relative if you are choosing an individual. Also, if you a choosing a minor as beneficiary, a guardian must be assigned to oversee/supervise the proceeds of the life insurance policy, and the spending of those proceeds until the minor named beneficiary reaches the age of adulthood.


Choosing to Name Multiple Beneficiaries

Identify multiple beneficiaries by name. You can name as many beneficiaries as you want to your policy.

It may be easier for you to states a specific percentage of the life insurance proceeds to be designated to each of the multiple beneficiaries.


Changing Your Life Insurance Beneficiary

You’ll want to remember to update your beneficiaries when life events occur. Some events including marriage, birth of a child and divorce may alert you to the need to update the beneficiaries on your life insurance policy.

Changing or adding a beneficiary may be as easy as requesting a beneficiary change form from your insurer, completing the request form and mailing it back to the insurer. The instructions for a beneficiary change should be stated in your policy.


There are two types of beneficiaries – Revocable and Irrevocable.

A "Revocable Beneficiary" is one that can be changed at any time in the future. Usually, you fill out a beneficiary change request form and send it to the insurance company. The insurance company will make the change to your policy.

An "Irrevocable Beneficiary" is a beneficiary that cannot be changed, unless the beneficiary agrees to the change. You must have the consent of the beneficiary to make the change. The irrevocable beneficiary may refuse to sign the consent form to be removed from the policy. In that case, there is nothing you can do.


How to Handle Contingent Beneficiaries

You may also name contingent beneficiaries to your life insurance policy. Any contingent beneficiaries only become beneficiaries if the primary beneficiaries die before the insured’s death benefit is paid out. If the insured and the primary beneficiary have died before the death benefit was paid out, the contingent beneficiary receives the life insurance proceeds.

It’s important to understand – If the insured passes away, and the primary beneficiary dies, and there is no contingent beneficiary – The proceeds of the life insurance policy pass on to your estate, and may be subject to additional taxes and fees that otherwise would not been taken from the proceeds. By adding a contingent beneficiary to your policy you can avoid this situation.

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