The beneficiary form is the most important page of a life insurance policy and the least read. It overrides your will. Whoever is named on it receives the money, even if the will says otherwise.
Always name a contingent
A primary beneficiary receives the benefit. A contingent receives it if the primary has died or cannot be found. With no living beneficiary, the money goes to your estate, which means probate, delays of months, and creditors paid first.
Minors cannot receive the money directly
If you name a child under 18, the carrier cannot pay them. A court appoints a guardian of the funds, which takes time and money. The clean fixes are a trust, or naming a custodian under your state's Uniform Transfers to Minors Act. Either takes a short conversation with an attorney or, for smaller policies, one extra line on the form.
Update after every life event
- Marriage, divorce, a birth, a death in the family.
- Some states automatically revoke an ex-spouse as beneficiary at divorce. Many do not. Do not rely on it.
- Group coverage through work has its own form. It does not update with your personal policy.
Per stirpes or per capita
If you name your three children equally and one dies before you, per capita splits the money between the two survivors. Per stirpes passes the deceased child's share down to their children. Most families mean per stirpes. Most forms default to per capita. Say which you want.
Naming your estate
Almost never the right answer. It puts the benefit into probate and exposes it to creditors. The one exception is when a trust is designed to receive it and an attorney has told you so.
Be specific
- Full legal name, date of birth, relationship, and a Social Security number if the form asks.
- Percentages that add to 100.
- Keep a copy. Tell the beneficiary the policy exists and which carrier holds it.
This guide is general information, not advice about a specific policy. Benefits, enrollment rules, and costs vary by state, carrier, and year. Confirm details for your situation with a licensed agent.
