What to Consider When Naming Beneficiaries On Your Life Insurance Policy

Naming beneficiaries on your life insurance policy is an important part of the life insurance process. Here are some factors to consider when choosing your beneficiaries:

Primary vs. Contingent Beneficiaries

A primary beneficiary is a person or multiple people who will receive the death benefit if you pass away. You can also name a contingent beneficiary who will receive the benefit if the primary beneficiary predeceases you.


Consider the relationship you have with potential beneficiaries, as well as their financial needs. For example, if you are married with children, you should name your spouse and children as beneficiaries.


If you are naming minor children as beneficiaries, consider setting up a trust to manage the funds until they are old enough to receive them.

Life Changes

Review your beneficiaries regularly to ensure that they reflect your current circumstances. Life changes such as marriage, divorce, or the birth of a child can impact your beneficiary choices.

Special Needs

Suppose you have a beneficiary with special needs. In that case, consider setting up a special needs trust to protect their eligibility for government benefits.

Estate Planning

If you have a large estate, consider naming your estate as the beneficiary to facilitate the distribution of your assets.


Keep in mind that life insurance benefits may be subject to taxes. Consider speaking with a tax professional to understand how naming beneficiaries can impact your tax liability.

Choosing beneficiaries for your life insurance policy is an important decision that should be carefully considered. By selecting the right beneficiaries and regularly reviewing your choices, you can ensure that your loved ones are financially protected during your unexpected passing.