Glossary

Beneficiary

The person, trust, charity or estate named to receive a life insurance death benefit or an annuity's remaining value when the insured or owner dies.

A beneficiary is whoever is named to receive the money when a life insurance policy pays out. It can be one or more people, a trust, a charity, a business or the insured's estate. The policy owner names beneficiaries on the insurer's form and can usually change them at any time.

Most policies let you name two tiers. The primary beneficiary receives the proceeds first; a contingent beneficiary receives them only if no primary beneficiary survives the insured. Within each tier, you set the shares. Hypothetical example: an owner names her spouse as 100% primary beneficiary and her two children as contingent beneficiaries at 50% each. If the spouse dies first, each child receives half.

Beneficiary designations pass outside a will and, when a living person is named, outside probate, so the form on file with the insurer generally controls even if a will says otherwise. Common problems include naming a minor child directly (insurers cannot pay a minor outright), forgetting to update after a divorce, and naming no contingent, which can send the money to the estate. Death benefits paid to a beneficiary are generally free of federal income tax. See how to choose a life insurance beneficiary and naming a minor child as life insurance beneficiary.

Last reviewed October 4, 2026

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Related terms

Beneficiary designation The signed instruction on file with an insurer naming who receives a policy's proceeds, in what shares and in what order. Primary beneficiary The person, trust, charity or estate first in line to receive a life insurance death benefit when the insured dies. Contingent beneficiary The person or entity who receives life insurance proceeds only if every primary beneficiary has died or cannot accept the payment. Revocable beneficiary A beneficiary the policy owner can change or remove at any time without that person's consent, the default for most life policies. Per stirpes A way of splitting proceeds by family branch, so if a beneficiary dies before the insured, that person's share passes to their own descendants. Claimant The person or entity that files for a policy's benefits, usually a named beneficiary, executor or assignee after the insured's death.

Related guides

Annuity beneficiaries and inherited annuity options What a beneficiary can do with an inherited annuity: lump sum, spousal continuation, 5-year or stretch payouts for non-qualified, 10-year rule for qualified. What happens to an annuity when you die How death benefits work before and after payouts begin, what beneficiaries receive, how the money is taxed, and which payout options leave nothing behind. Bad faith claim handling by life insurers What bad faith means for a life insurance claim, how state law and ERISA change your remedies, and what to document if an insurer stalls or denies unfairly. What happens if your beneficiary dies before you Who gets the death benefit when a named beneficiary dies first: contingent beneficiaries, shares, anti-lapse rules, simultaneous deaths and the estate fallback. Life insurance beneficiary disputes and interpleader When two people claim one death benefit, insurers file interpleader. How Rule 22 and 28 U.S.C. 1335 work, and what claimants should do. Burial insurance vs final expense vs preneed Burial and final expense insurance are the same small life policy; preneed is a prepaid funeral contract. How each works and what happens if plans change.

Related tools

Lost life insurance policy finder A step-by-step search for a policy a relative may have left, with your state's unclaimed property link and regulator contact.