Guide
How to Choose a Life Insurance Beneficiary
Naming a beneficiary sounds simple, but it is one of the most common places where a policy goes wrong years after purchase. Getting it right at the start, and updating it as life changes, is what makes sure the death benefit actually reaches the people you intend it for, without delay or dispute.
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What should you know about Primary and contingent beneficiaries?
Your primary beneficiary is first in line to receive the death benefit. A contingent beneficiary receives it only if the primary beneficiary has already died. Always name a contingent beneficiary — without one, the payout can end up going through probate if the primary is unavailable.
What should you know about You can split a benefit among multiple people?
Beneficiaries can be named by percentage rather than as a single person, which is common when a policyholder wants to divide proceeds among several children or family members.
What should you know about Naming a minor child directly is a common mistake?
Insurance carriers cannot pay a death benefit directly to a minor. If a child is named without a custodian or trust in place, the payout is typically directed to a court-appointed guardian of the estate, which is slower and more expensive than naming a UTMA custodian or trust from the start.
What should you know about Trusts and special circumstances?
Naming a trust as beneficiary can be useful when you want to control how and when proceeds are distributed, when a beneficiary has special needs and receiving a lump sum could affect government benefits, or when you want to avoid probate for a more complex estate.
What should you know about Review beneficiaries after every major life event?
Divorce, remarriage, a new child, or the death of a named beneficiary should each trigger a review. Beneficiary designations override what a will says, so an outdated form — naming an ex-spouse, for instance — can send the payout somewhere you never intended.
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Where can you read more about life insurance?
How life insurance works
Basics
Why it matters
Basics
Do I need it?
Basics
How much do I need
How much & how to buy
How to buy a policy
How much & how to buy
Underwriting explained
Underwriting
This page is educational and is not an offer of insurance, a quote, or a guarantee of coverage. Underwriting decisions, rate classes, and product availability are determined by each insurance carrier and vary by state, age, and health history. Carrier guidelines change without notice.