Term Life Insurance Beneficiary
Choosing a Beneficiary for your
Life Insurance Policy
Choosing a term life insurance beneficiary can be difficult. The person you choose to receive the death benefits of your life insurance policy is the beneficiary. In addition, you select beneficiaries to inherit your estate upon your death.
Life Insurance Beneficiary Options
- Revocable - You are allowed to change the life insurance beneficiary at any time.
- Irrevocable - You are only allowed to change the life insurance beneficiary with their consent.
You can choose a single beneficiary or multiple beneficiaries, subject to any limitation the insurance compay may place on the number of beneficiaries.
At the time you make application for a life insurance policy, all beneficiaries must have an "Insurable Interest" in you. A life insurance beneficiary with an insurable interest may include your spouse, your children, relatives and business partners.
Proportion of Benefit
You may have 2 or more life insurance beneficiary selections, in this instance you will designate what percentage or proportion of your estate you want each beneficiary to receive. Shop and compare rates on term life insurance.
Distribution of Benefits
The beneficiary designations address the distribution of life insurance policy proceeds to the beneficiaries.
- Primary Beneficiary - is your first choice to receive the proceeds of your life insurance policy.
- Secondary Beneficiaries - receive the proceeds in the event they outlive you and the primary beneficiary.
- Final Beneficiary - receive the policy benefits if they outlive all the primary and secondary beneficiaries. You will usually find a spouse or children as primary or secondary beneficiaries.
If more than one beneficiary is chosen, you must designate the percentage or proportion you want each life insurance beneficiary to receive.
Changes To A Beneficiary
You may request a beneficiary change form from your insurer.
Remember to review your beneficiary life insurance designees on a regular basis, including when there is a life change such as divorce, marriage, birth of a child or remarriage.
Make certain you understand the proper procedures for changing life insurance beneficiaries before attempting to change beneficiary life insurance designations.
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