Changing Life Insurance Beneficiaries: A Quick Guide

Changing the beneficiary of a life insurance policy is a straightforward process, but it's important to understand the implications of doing so. A life insurance beneficiary is the named person or people who will receive a payout or lump sum from the policy in the event of the policyholder's death. The policyholder can choose anyone as their beneficiary, including a spouse, partner, child, other relatives, friends, or charitable organisations. It's also possible to name multiple beneficiaries and choose a backup beneficiary. Changing the beneficiary can be done at any time by contacting the insurance company, but it's essential to keep the policy up to date, especially after significant life changes, to ensure the benefit goes to the intended recipient.

Contact your insurance company

Changing the beneficiary of your life insurance policy is simple. To do so, you need to contact your insurance company. The process for changing a beneficiary may differ depending on the provider.

Firstly, you should call your insurance agent or company and inform them of your intention to change the beneficiary. They will then guide you through the correct procedure. Usually, this involves filling out a form either online or in writing.

Generally, you will need to fill out a change of beneficiary form, which includes information such as the policyholder's name, the new beneficiary's name, and the reason for the change. You may also need to provide a copy of the policyholder's death certificate if the beneficiary is being changed due to their death. Once you complete the form, you must submit it to the insurance company for approval. The insurance company will review the form and let you know if the change has been approved.

It's important to note that the only person who can change the beneficiary is the policyholder. The policyholder is the person whose name is on the life insurance plan. There should only be one policyholder per plan.

Fill out a change of beneficiary form

To change the beneficiary of your life insurance policy, you will usually need to fill out a change of beneficiary form. This form will include information such as the policyholder's name, the new beneficiary's name, and the reason for the change. The process for changing a beneficiary may differ depending on the provider, but there are some general guidelines to follow.

Firstly, contact your insurance company to request the correct forms. You may be able to do this by phone, or your insurance company may have a web portal that you can use to make changes. If you are unsure about the process, it is best to call your insurance agent or company for guidance. They will be able to provide you with the necessary forms and inform you of any specific requirements or procedures.

Once you have obtained the change of beneficiary form, carefully fill out all the required information. Provide the policyholder's name and the new beneficiary's name, ensuring that all details are accurate. You may also need to include the reason for the change. If the beneficiary is being changed due to the previous beneficiary's death, you may need to provide a copy of their death certificate.

After completing the form, submit it to your insurance company for approval. They will review the request and inform you if the change has been approved. It is important to note that, depending on the terms of your policy, there may be instances where you need approval to change the beneficiary. For example, if you have given power of attorney to someone else, live in a community property state, or have named an irrevocable beneficiary, you may need approval for the change.

Remember that you can change your beneficiary at any time, and it is a straightforward process. Keeping your life insurance beneficiaries up to date is essential, especially if your life circumstances change, such as getting married, divorced, or having children. By staying proactive and following the necessary steps, you can ensure that your life insurance policy reflects your current wishes and protects your loved ones' future.

Provide the reason for the change

There are many reasons why you might want to change the beneficiary of your life insurance policy. Here are some common reasons for making this change:

Relationship Changes

A change in your relationship status with your current beneficiary could prompt you to switch beneficiaries. For example, if you get divorced and then remarry, you may want to update your beneficiary from your former spouse to your current one. This is a common scenario that can help ensure your wishes are accurately reflected in your life insurance policy.

Beneficiary's Financial Situation

If your chosen beneficiary inherits a substantial sum of money from another source, you may consider changing the beneficiary. This could be due to a desire to distribute your benefits to someone with a greater financial need or to avoid any potential complications that could arise from the beneficiary already having a substantial sum.

Life Stage Changes

Major life events, such as the birth of a child or your children becoming adults, can be a reason to reevaluate your beneficiary. You may want to add your children as beneficiaries or choose to remove them as beneficiaries once they reach adulthood and become financially independent.

Death of the Beneficiary

In the unfortunate event that your primary beneficiary passes away, you will need to update your life insurance policy. In such cases, you would typically designate the contingent beneficiary, or backup beneficiary, as the new primary beneficiary.

Personal Preferences

Over time, your relationships with potential beneficiaries may evolve, and you may simply feel that someone else is now a better fit for this role. This could be due to a change in your feelings toward the current beneficiary or a strengthening of your relationship with someone else.

Remember, you can change your life insurance beneficiary at any time by contacting your insurance company, and it's a good idea to have a few backup beneficiaries in mind. Keeping your beneficiary designation up to date ensures that your wishes are honoured and that your benefits are distributed according to your preferences.

Submit the form for approval

Once you have filled out the change of beneficiary form, you will need to submit it to your insurance company for approval. The form will include information such as the policyholder's name, the new beneficiary's name, and the reason for the change. You may also need to provide a copy of the policyholder's death certificate if the beneficiary is being changed due to their death.

After submitting the form, the insurance company will review it and let you know if the change has been approved. It is important to note that the process for changing a beneficiary may differ depending on the insurance provider. Therefore, it is recommended to contact your insurance company to understand their specific requirements and procedures.

Additionally, there are a few instances when you may need approval from the insurance company or a legal authority to change the beneficiary name. These instances include:

• Giving power of attorney to someone else to make decisions on your behalf.
• Living in a community property state, which may have specific laws regarding beneficiary changes.
• Naming an irrevocable beneficiary, which cannot be changed by the policyholder alone once it is locked in. In this case, the beneficiary would need to agree to forfeit their rights for any changes to be made.

By submitting the form and receiving approval from the insurance company, you can ensure that your life insurance policy reflects your current wishes and circumstances. It is also crucial to keep your beneficiaries updated, especially if there are significant changes in your life, such as marriage, divorce, or the birth of a child.

Keep beneficiaries up-to-date

Keeping your life insurance beneficiaries up-to-date is essential to ensure that the death benefit payout goes to the intended recipient. This is especially important if your life circumstances have changed, such as getting married, divorced, or having a child. For example, if you have named a previous spouse as the beneficiary but have since remarried, you may want to update the beneficiary to your current spouse.

If you have young children or minors who depend on you, most insurance companies will require you to choose an adult custodian or legal guardian to manage the benefits on their behalf should you pass away before they turn 18. In such cases, it is important to keep the custodian information up-to-date as well.

It is also a good idea to have a few backup beneficiaries in mind, as you never know when you might need to make a change. For instance, if you name your spouse as the primary beneficiary but they pass away at the same time as you, a backup beneficiary can step in to receive the benefits.

By regularly reviewing and updating your life insurance beneficiaries, you can avoid any complications and ensure that your wishes are honoured.

Frequently asked questions