What is a beneficiary?

Who needs a beneficiary?

What powers does a beneficiary have?

A beneficiary generally doesn’t control a life insurance policy while the insured is living. With a revocable beneficiary, the policy owner can usually change the beneficiary designation without that person’s consent. An irrevocable beneficiary has additional rights, and the policy owner generally needs the beneficiary’s consent to change designation. After the insured passes away, the beneficiary can file a claim to receive a death benefit.

Choosing your life insurance beneficiary

Who should your beneficiary be? A life insurance policy exists to financially protect your loved ones. It’s not an easy situation to think about, but making a smart plan is important to protect your family in case something happens to you.

You can split up your benefit however you choose. You can even elect backup or “contingent” beneficiaries to receive funds should your primary beneficiary predecease you. Courts may charge fees if they must rule on a dispute. So it’s important to be as clear and concise as possible with the way you want your assets distributed to avoid confusion and delays.

Depending on your wishes, this could begin to get complicated—quickly. The good news is that you don’t have to figure out all of this on your own. Our agents are experts can walk you through each step, helping you carefully consider your options, so you can be sure your loved ones are taken care of exactly as you intended.

What information do I need to select a designated beneficiary?

There’s no single answer to this question. It depends on your particular life insurance policy or will. To start, you’ll need to provide the beneficiary’s full legal name and relationship to you (child, spouse, father, brother, etc.). 

Providing as much information as possible will ensure that there is no confusion about your wishes, that your beneficiaries can be found, and that your benefits will be distributed in a timely manner. 

If you can, add information such as:

• Mailing address
• Email address
• Phone number
• Date of birth

Can I have more than 1 beneficiary?

Yes. You can name more than one primary beneficiary and divide the life insurance benefit among them, typically by percentage. You can also name one or more contingent beneficiaries to receive the benefit if a primary beneficiary can’t. If you assign percentages, make sure they add up to 100%.

Are there restrictions on who can be a beneficiary?

Most people and many entities can be named as beneficiaries, though policy terms and state laws may affect certain designations. Minors may require special planning because insurers generally don’t pay life insurance proceeds directly to them. A trust or custodian may be used to manage the funds on a child’s behalf.

How do beneficiaries get paid?

After the insured passes away, a beneficiary typically submits a claim to the life insurance company along with required documentation, such as a certified death certificate. Once the claim is approved, the benefit is paid according to the policy and available payment options. Depending on the insurer and policy, those options may include a lump-sum payment or other settlement choices.

What happens if I don’t elect a beneficiary?

If you don’t name a beneficiary, your life insurance benefit will be paid according to the terms of your policy. In some cases, the benefit may be paid to your estate, which can mean additional paperwork and may require the funds to go through probate. Naming  a beneficiary and keeping the designation current can help make your wishes clearer and simplify the claims process for your loved ones. 

Can a spouse override my life insurance beneficiary?

A spouse generally can’t simply claim the beneficiary you named on an individually owned life insurance policy. However, state law, the type of policy or plan, court orders, and certain spousal rights may affect who is entitled to the benefit. If you’re naming someone other than your spouse or have questions about your situation, consider speaking with your attorney. 

Example

Your will states that 50% of your assets should go to your spouse and 25% to each of your two children. If one child predeceases you and is unable to collect a share, what happens? Do you want that 25% split equally between the other beneficiaries? Do you want all of it to go to your other child? Do you want it to go to your spouse? Do you want it to go to the spouse or the children of your deceased child? Without proper documentation, a court may have to decide.

Situations like this can create questions about how your assets should be distributed. Keeping your beneficiary designations and estate planning documents clear and up to date may help reduce confusion and potential disputes. A life insurance agent or an estate attorney can help you understand your options.

Can I change my designated beneficiary later on?

In most cases, yes. If you named a revocable beneficiary, you can generally update your designation by following your insurer’s process. If you named an irrevocable beneficiary, you’ll typically need that beneficiary’s written consent to make a change. If you’re unsure what your policy allows, contact your agent.

When should I consider updating my beneficiaries?

You can make changes whenever you like, but major life events are often a good time to reevaluate your policy and your beneficiaries. If you’ve recently married, divorced, lost a loved one, or welcomed children or grandchildren, that may change the way you want your wealth to be distributed when you pass away.

We also understand that this is not something you think about every day, and it shouldn’t be. So, we recommend adding a yearly calendar reminder to check in and consider your options.

Am I a life insurance beneficiary?

The months after losing a loved one are never easy. There are many difficult tasks that need to be completed in a time of grieving. One of them is to learn if the deceased had a will, a life insurance policy, or other assets that need to be properly distributed.

To find out if you are a beneficiary of a will or a life insurance policy after your loved one has passed away, there are a number of steps you can take:

Ask the executor or family attorney

If the deceased has named an executor of the estate, that person should have information on life insurance policies and how assets should be distributed.

Search the probate courts

Wills and other funds often go into a legal process called probate, in which a court helps decide how assets are split according to local laws. Generally, the county court district where the deceased last lived is the first place to look for information.

Search online

If money goes unclaimed, insurers are required to transfer it to a state-run account. There are many ways to search these records online for free. You can then contact the state’s unclaimed property office and start the process to claim your funds.

We can help

think you may have been mentioned in a will or there are life insurance funds due you that you haven’t received, don’t give up. With the right help, you can claim what’s yours. Our agents understand the life insurance process and have helped countless individuals. We can help you, too.

Related: Learn more about life insurance

Should I have a life insurance policy?

By simply asking this question, you are taking the first step to making sure your family is protected when you pass away.

Many employers offer small life insurance policies as a benefit, but that may not be enough to ensure your family’s stability after you’re gone. Considering additional protection is an important part of everyone’s financial journey.

If you would like help creating a will or adding a life insurance policy, talk to an agent. They will help you carefully consider all of your options and align your goals, so your wishes are clear, and your family is protected for the long term. 

Related: 5 reasons to consider whole life insurance

Life insurance beneficiaries FAQs