Beneficiary
The person or entity who receives the death benefit when a life insurance policyholder dies.
A beneficiary is the person, people, trust, charity, or organization you designate to receive the death benefit from your life insurance policy. You name beneficiaries when you buy the policy and can update them at any time — and you should update them after every major life event (marriage, divorce, birth, death of a previously-named beneficiary).
Most policies allow you to name a primary beneficiary (gets paid first) and a contingent beneficiary (gets paid only if the primary dies before you do). You can split the death benefit among multiple beneficiaries by percentage (e.g., spouse 70%, two children 15% each).
Naming a minor child directly as beneficiary is usually a mistake — most carriers won't pay a minor directly, so the funds end up in court-supervised guardianship, which is slow and expensive. Better options: name a trust set up for the child's benefit, name an adult guardian "in trust for" the child, or use the Uniform Transfer to Minors Act (UTMA).
Beneficiary designations on life insurance OVERRIDE your will. If you got divorced and never updated your policy, your ex-spouse will receive the death benefit even if your will says otherwise — this is one of the most common life-insurance disasters Geneva sees. Update beneficiaries regularly.
Related terms:Term Life Insurance·Whole Life Insurance
Related Geneva services:Life Insurance