How to Choose Your Life Insurance Beneficiary

Primary and Contingent Beneficiaries

A primary beneficiary is first in line to receive the death benefit. A contingent (or secondary) beneficiary receives it only if the primary beneficiary is no longer living. You can name multiple people at either level and split the benefit by percentage.

Common Considerations

• Naming a minor directly can create complications — funds may need to go through a court-appointed guardian or a trust
• A named beneficiary generally overrides what a will says, so the two need to stay consistent
• Life events — marriage, divorce, a new child — are the most common reasons a beneficiary designation goes out of date
• Naming your estate as beneficiary is usually avoidable and can expose the payout to probate

Keep It Updated

Beneficiary designations don’t update automatically after a major life change. Reviewing them whenever you review your coverage overall — after a marriage, divorce, birth, or death in the family — is the simplest way to avoid an outdated designation causing problems later.