What Is a Life Insurance Beneficiary?
Plain-English definition: The person, trust, estate or entity designated to receive policy proceeds after a covered death.
The payment instruction that follows a death
A beneficiary designation directs the insurer where to pay covered proceeds. Clear names, shares and contingency instructions can reduce delay and avoid an unintended payment to an estate.
Receiving proceeds is different from controlling the policy
A beneficiary receives proceeds but does not usually control the policy during the insured's life. The owner holds those rights.
How primary shares can be arranged
Two primary beneficiaries and one backup tier
An owner might name two adult children as equal primary beneficiaries and a trust as contingent beneficiary. The percentages in each tier should total 100 percent.
Review names, shares and backup recipients
- Name beneficiaries precisely
- Set percentages for every tier
- Review the designation after marriage, divorce, births or deaths
Explore beneficiary choices and consequences
Use life insurance beneficiary guide to see how this definition affects a real policy decision.
Terms to read alongside beneficiary
Sources for understanding beneficiary
This page explains general insurance usage. State law, the issued contract and the insurer's current records control a specific policy. Use the sources below to verify general terminology, then check the exact policy language.