Life Insurance Beneficiaries: 15 Questions You Should Ask
Updated: Sep 22
Life Insurance Beneficiaries: 15 Frequently Asked Questions
Learn what life insurance beneficiaries are, how primary and contingent beneficiaries work and why beneficiary reviews matter.
Life Insurance Beneficiaries
Buying a life insurance policy is only part of the process. You also need to make sure the policy clearly identifies who should receive the proceeds.
What is a primary beneficiary?
A primary beneficiary is the person or entity designated to receive the life insurance proceeds if the insured dies, assuming the claim is payable.
What is a contingent beneficiary?
A contingent beneficiary is generally the backup beneficiary who may receive the proceeds if the primary beneficiary cannot receive them.
Can I have more than one beneficiary?
Yes, depending on the policy and beneficiary designation rules. Multiple beneficiaries can generally be assigned specified percentages or shares.
Can I change my beneficiary?
The ability to change a beneficiary depends on the policy and whether the designation is revocable or otherwise restricted.
Should I review my beneficiaries?
Yes. Beneficiary designations should be reviewed periodically and after significant life events.
What life events should trigger a beneficiary review?
Consider reviewing beneficiaries after:
Marriage
Divorce
Birth of a child
Adoption
Death of a beneficiary
Remarriage
Major family changes
Estate-planning changes
Can I name a child as a beneficiary?
This can involve legal and practical considerations. Minors generally cannot simply receive and manage large insurance proceeds in the same way as an adult beneficiary. Consumers should seek appropriate legal advice when considering beneficiaries who are minors.
Can I name a trust?
Depending on the situation and policy rules, a trust may be named as beneficiary.
Because trusts involve legal and estate-planning considerations, professional legal advice may be appropriate.
What happens if my beneficiary dies before me?
That depends on the policy and the remaining beneficiary designations. This is one reason contingent beneficiaries can be important.
Should I name my estate?
Naming an estate can have different legal and administrative consequences than naming an individual beneficiary. Consumers should discuss this choice with an appropriate legal or tax professional.
Does my will automatically change my life insurance beneficiary?
Generally, beneficiary designations on an insurance policy control the payment of the policy proceeds, subject to applicable law and the policy contract.
Do not assume that changing your will automatically changes your insurance beneficiary.
Should I tell my beneficiary about the policy?
It is generally wise to make sure beneficiaries know that coverage exists and know how to locate the policy information.
What information should beneficiaries have?
Helpful information can include:
Insurance company name
Policy number
Coverage amount
Policy documents
Agent or broker contact information
Location of the policy records
Why does this matter?
The NAIC emphasizes that beneficiaries can have difficulty claiming benefits when they do not know about a policy or cannot locate the relevant information.
Final Thought
A life insurance policy can only accomplish its intended purpose if the policy information and beneficiary designations are kept current.
Review your beneficiaries regularly and consult qualified legal or tax professionals when your situation requires specialized advice.
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