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Can a life insurance company change the beneficiary?

Daniel Walker
Licensed Insurance Agent for 15 Years

UPDATED: Mar 19, 2020

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Life Insurance BeneficiaryA life insurance company can only change the beneficiary if the owner of the policy has given the insurance company permission to do so.

Many people feel protective of their life insurance policy because they want to ensure that the people they have designated as beneficiaries receive the money intended.

The following article will give more information about choosing a beneficiary as well as information about changing a beneficiary when needed. Also, be sure that you enter your zip code above for free life insurance rates!

How do I choose a beneficiary for my life insurance policy?

One of the most important aspects of a life insurance policy is choosing the beneficiary. A beneficiary is the person, persons, or entity that will receive the cash benefit of a life insurance policy. You can have one or more beneficiaries and the beneficiary can be a person, a trust, an estate, or a charity. You can split the benefit between one or more of these options or designate just one recipient.

Beneficiaries are listed as primary, secondary and final. A primary beneficiary is your ideal choice, who you want to benefit from your policy. A secondary beneficiary is chosen in case your primary beneficiary is not alive when the policy is paid out. This typically applies if a spouse is a primary beneficiary and the spouses die together in an accident or if the owner of the policy owner does not update the policy when the primary beneficiary dies. A final beneficiary is designated in case the primary and secondary beneficiaries are not living.

Choosing a beneficiary is very personal and no formula fits everyone, but there are some main things to consider. The first is to ask: who will suffer financially from your death? Is it a spouse, your children, or a friend you support? Who will be paying for your funeral and will they need helping doing so? Some people choose someone who has had a meaningful impact on their life, even without that person’s knowledge, to be the beneficiary.

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The beneficiary must be 18 years of age or older, so if you are concerned about your children, you can leave your policy payout to a trust fund that your children can have access to at a certain age. That trust will still need to be administered by someone that you trust. If you choose to leave your policy payout to an entity such as a college or church, you must specific who at that entity will be in charge of seeing that the funds are used in the way you have chosen.

It is vitally important to choose a beneficiary. If you do not, the state that you live in will get the payout of your policy. If you have debt or owe money on anything, the state will settle your debts and keep the rest of the money. Giving the state and your debtors your money as your last act is not something most people want to do. Be sure to name a beneficiary; even waiting a day is too long. Be prepared to choose a beneficiary before you sign your policy.

How do I make changes to a beneficiary on my life insurance policy?

As the owner of the policy, you are the only person who can legally change the beneficiary on your policy. It is very simple to change the beneficiary. This can be done by filling out a form, signing it, and turning it into your life insurance company. Many companies allow the initial paperwork to be done online so that the company can prepare the changes while waiting for your signature. Your signature will need to be notarized and the changes to the policy take place as soon as the form is processed by your insurance company.

There are many reasons to change a beneficiary on a life insurance policy. Some of the most common reasons to change a beneficiary are marriage, the birth of a child, the acquiring of more assets, a negative turn of events in a relationship, a divorce, or a change in life philosophy. Just as the choosing of a beneficiary is a personal choice, so is the reason behind making a change in beneficiaries.

Before you can choose a beneficiary, you must choose a life insurance company that you can trust. A good way to find a life insurance company is to use an online comparison tool. An online insurance comparison tool is a tool that allows you to put your information in once, and receive rates and quotes from several companies. Enter your zip for free insurance quotes now!

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