beneficiary life insurance

What is a Beneficiary in Life Insurance?

In this article, we look at the insurance term “beneficiary” on life insurance. We have put together a guide on what beneficiary is, how beneficiary works as well as some questions we get asked frequently about beneficiaries. 

What does “beneficiary” mean? 

Beneficiary is the person to whom the death benefit will be paid. 

Can you have children as a beneficiary? 

Yes. But you are advised to name your children as a beneficiary only if they are over 18 or beyond the age of majority stated in the law of the country you live in.  

Can you have more than one beneficiary on a life insurance policy? 

Yes, you can. You have the option of having more than one beneficiary on your life insurance policy. Many life insurance policyholders typically name multiple beneficiaries on their life insurance plans. The process is also simple to do. 

Can life insurance beneficiary be a minor? 

Yes, you can. But you are advised not to do so because if your life insurance beneficiary is a minor, then the payout of death benefit gets more complicated. The death benefit would first go to a court-appointed guardian who is a custodian of the account. Once the minor reaches the age of majority (18 years of age in most countries), the death benefit would then get transferred to the account of the 18-year-old beneficiary. 

Can life insurance beneficiary be changed after death? 

No. Life insurance beneficiary cannot be changed after you, as the insured, die. The only exception for this is a change made by a court of law. 

what is a beneficiary

Can life insurance beneficiary be someone other than spouse? 

Yes. Your life insurance beneficiary can be someone else besides your spouse. As a life insurance policyholder, you can select another member in your family such as your adult kid (whose age is 18 years old and above), your extramarital boyfriend or girlfriend your business partner. 

Is the beneficiary of life insurance responsible for debt? 

No. If you are the life insurance beneficiary, you do not need to take the responsibility of the debt the insured had.  

The mere exception with which you can use life insurance to clear the debts of the estate of the deceased is in the event of a living beneficiary not being stated on the life insurance policy. 

Should life insurance beneficiary be a trust? 

The answer is it depends. Naming a trust as your life insurance beneficiary has both pros and cons. On the one hand, a trust helps you to avoid probate which is defined as a process in which your estate is proven, and then given out to your heirs. Also, the trust serves as your tool to control the cash flow that provided for your children. 

On the other hand, it can be expensive to create a trust. Additionally, when you are setting up a trust, you need to get a will in place first.  

Collaborating with an estate planning attorney and a CPA can help to decrease the heavy lifting of the admin work and guarantee that every bit and piece is accurately implemented. 

What happens when the beneficiary of a life insurance policy is deceased? 

When the life insurance beneficiary dies before the insured, the death benefit goes to primary co-beneficiaries no matter they are heirs or not. If there are no primary co-beneficiaries, secondary (contingent) beneficiaries have the right to take the death benefit. If no living beneficiaries exist, the face amount will be given to the estate of the insured. 


When it comes to beneficiaries on your life insurance policy, do choose the person or the people wisely so desirable outcomes are expected after your premature demise and the payout of the death benefit (face amount) would go to the most suitable person. Keep in mind that you are advised not to name a minor child as your beneficiary as he or she would not get the death benefit until after turning 18.