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February 15, 2019

Who Can Be a Life Insurance Beneficiary?

Who Can Be a Life Insurance Beneficiary?

When applying for a life insurance policy, one would think naming the beneficiary is the easiest part – a child, spouse, or trusted relative. However, it can get a little more complicated than just jotting down a name. There are many things you should consider when naming your beneficiary such as who to pick, making sure you name them correctly, and avoiding any problems your beneficiary may run into should they have to file a claim.

First, there are two different types of beneficiaries: primary and contingent.


The primary beneficiary is the person (or persons) who will receive the death benefit upon your death. You can have multiple primary beneficiaries if, for example, you want to leave an equal amount for each of your children.

So when retiree coverage changes dramatically or is canceled altogether, many are left looking to replace their retiree health benefits.


The contingent beneficiary can be added in case the primary beneficiary dies before you do or is otherwise unable to receive the policy proceeds. This will allow your contingent beneficiary to claim the death benefit rather than it going to the state or estate of the insured due to no beneficiary.


When choosing who gets your benefits, there are a few common considerations.


The primary purpose most people get life insurance is to ensure their loved ones are taken care of should something happen to them. Anyone who relies on your financial support can be your primary beneficiary such as your spouse, children, or parents. Additionally, if you have more than one, you can decide the order and amount of the death benefit your beneficiaries will receive.

Legal Guardian

If your beneficiary is a minor, the insurance company may ask for you to appoint a legal guardian. In most states, insurance companies may not pay your death benefit to anyone under the age of 18, so it’s critical to appoint a legal guardian so the funds can be released.


It is possible and common to assign multiple beneficiaries. There are two ways to do this:

Per stirpes:

You can distribute your proceeds based on family lineage. Meaning the benefit would be passed down equally to the beneficiary or their surviving children.

Example: Joe designates his daughter Sally and son James as his beneficiaries. Sally passes away before Joe does, so then Sally’s children would get the proceeds from Joe’s life insurance once he passes.

Per capita:

This means the proceeds would be split equally amongst the beneficiaries.

Example: Katy equally designates her three children and husband as her beneficiaries. Each child as well as her husband would get a quarter of her death benefit.


Should your beneficiary die before you, you should be proactive on renaming your beneficiary. Simply call the insurance company and have it changed. You could also have them move your contingent beneficiary to primary. If you and your beneficiary pass at the same time and you do not have a contingent beneficiary, your death benefit would most likely go to your estate.


  • Identify the primary beneficiary by their full name, date of birth, and Social Security Number.
  • Designate a percentage rather than dollar amounts to your beneficiary. If your policy grows in value, your beneficiary will also receive the growth amount rather than the $50,000 you signed them up for.
  • Identify a contingent beneficiary.
  • Keep your life insurance policy updated should your beneficiary change names.
  • Designate a guardian if your beneficiary is a minor.

Naming a beneficiary can get more complex depending on the policyholder. There are a several things you can avoid now to reduce any problems your beneficiaries may have later on. Consider talking to a licensed insurance professional for more details about naming a beneficiary.

Categories: Life Insurance, Term Life Insurance, Whole Life Insurance

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