Life Insurance Beneficiary Designations

Learn beneficiary distinctions.
Help yourself protect your family.
Credit: Ted Bongiovanni

Life insurance beneficiary designation can either be revocable or
irrevocable.

A revocable beneficiary can be changed by the owner of the policy without the signature of the beneficiary. An irrevocable beneficiary gives the beneficiary extra ordinary powers, so that policy changes can only be made with the signatures of the owner of the policy and the beneficiary.

A revocable beneficiary can be changed by the owner of the policy without the signature of the beneficiary. An irrevocable beneficiary means policy changes can only be made with the signatures of the owner of the policy and the beneficiary.

This is a very important distinction and because of this, irrevocable beneficiaries are often included as part of a divorce settlement. Policy changes, such as decreases in coverage or accessing any cash surrender value, require the signature of the irrevocable beneficiary on the policy.

Beneficiaries, whether revocable or irrevocable, can also be divided into
either primary beneficiaries or contingent beneficiaries. Primary
beneficiaries are the person who would receive the proceeds if the insured
were to die. The contingent beneficiary takes effect if the insured and the
beneficiary were to die simultaneously. An example of this might be a
husband who names his spouse as the beneficiary, but names his children as
contingent beneficiaries. This will insure the policy proceeds are paid out
immediately should the husband and wife die together.

Beneficiaries can also be divided into either primary beneficiaries or contingent beneficiaries. Primary beneficiaries are the person who would receive the proceeds if the insured were to die. The contingent beneficiary takes effect if the insured and the beneficiary were to die simultaneously.

It's important that if a beneficiary is a minor, a trustee be named.
The trustee should be someone with whom the insured has a strong relationship and has a solid financial background. He or she should also be
someone who is of sound mind, and preferably not entering their senior years.

If you have any questions, please do not hesitate to call us at
1-866-899-4849, or you can get a quote at our Instant Quote Page.