Updating Final Wishes: Changing Beneficiaries On Burial Insurance Policies

Changing the beneficiary on burial insurance is a straightforward process, but it's important to understand the reasons and requirements for doing so. The policyholder, or owner, of a burial insurance plan may need to change the beneficiary due to life changes, such as divorce, remarriage, or the death of a loved one. It's crucial to keep the beneficiary designations up to date to ensure that the benefits are distributed according to the policyholder's wishes. While the process is generally simple, there may be specific requirements or restrictions, especially if the policyholder has an irrevocable beneficiary or lives in a community property state. In most cases, contacting the insurance company and filling out the necessary forms is all that's needed to change the beneficiary.

Reasons for changing the beneficiary on burial insurance

There are many reasons why someone may want or need to change the beneficiary on their burial insurance policy. In some cases, the beneficiary may have predeceased the insured. In other cases, there may be other underlying reasons, such as divorce or separation from a spouse who was initially listed as the beneficiary. It is also possible that the designated beneficiary has become cognitively unable to carry out their duties.

Additionally, the beneficiary on a burial insurance policy may need to be changed if the policyholder's circumstances or wishes change. For example, if the policyholder initially chose a primary beneficiary but now wishes to designate a contingent or tertiary beneficiary instead. This type of beneficiary designation ensures that there is a "back-up" beneficiary in place should the primary beneficiary predecease the policyholder.

It is important to note that the process of changing the beneficiary on a burial insurance policy may vary depending on the specific policy and insurance company. In most cases, policyholders are allowed to change beneficiaries as often as they wish, provided they are the owner of the policy. However, insurance companies may require certain conditions to be met or have specific requirements in place for beneficiary changes.

Who can change the beneficiary on a burial insurance policy?

Burial insurance is usually purchased by those aged between 50 and 80, to cover funeral and related costs. The proceeds from burial insurance typically range from $5,000 to $50,000. When purchasing burial insurance, it is important to name a beneficiary who will be involved in your final preparation process. This is because they will be responsible for making and paying for the arrangements using the proceeds from the insurance plan.

In most cases, a policyholder is allowed to change the beneficiary on their burial insurance policy as often as they wish, provided they are the owner of the policy. However, certain conditions may need to be met for the change to be approved. For example, if the beneficiary designation is irrevocable, you will need the consent of that individual to change it.

The only person allowed to make changes to a life insurance policy's beneficiaries is the policyholder. The only exception is if the policyholder has granted someone power of attorney, which allows them to make financial, legal, or medical decisions on their behalf.

The policyholder can change the beneficiaries as long as the policy is active. No one can change beneficiary designations after the policyholder dies.

There are two circumstances when the policyholder needs another person's permission to update a beneficiary: if the policyholder lives in a community property state or if they named someone as an irrevocable beneficiary.

If you live in a community property state and bought your policy after getting married, you'll need your spouse's permission to name someone other than them as your beneficiary.

You can name any of your life insurance beneficiaries as revocable or irrevocable. Irrevocable beneficiaries are rare and cannot be removed from a policy without their approval.

How to change the beneficiary on a burial insurance policy

Changing the beneficiary on a burial insurance policy is a straightforward process, but it's important to understand the implications and any potential restrictions. Here's a step-by-step guide on how to change the beneficiary on a burial insurance policy:

Understanding Beneficiaries and Their Types

Before changing your beneficiary, it's crucial to understand the role of a beneficiary and the different types that exist. A beneficiary is the person or entity designated to receive the benefits from your burial insurance policy after your death. There are two main types of beneficiaries: primary and contingent. A primary beneficiary is the first in line to receive the death benefit, typically a spouse, child, or family member. A contingent beneficiary, also known as a secondary beneficiary, is a backup who will receive the benefit if the primary beneficiary is deceased or unable to accept the funds.

Reasons for Changing Beneficiaries

There are numerous reasons why someone may need to change the beneficiary on their burial insurance policy. Common reasons include the death of the original beneficiary, divorce or separation, cognitive incapacity of the beneficiary, or a change in your personal circumstances, such as getting married or having children.

Checking Your Policy and Any Restrictions

Before initiating the change, carefully review your burial insurance policy. Some policies may have specific conditions or requirements for changing beneficiaries. For example, if you previously made an "irrevocable designation," you may need the current beneficiary's consent to remove them or add a new beneficiary. Additionally, if you live in a community property state and purchased the policy after marriage, you'll need your spouse's permission to name someone other than them as the beneficiary.

Contacting Your Insurance Company

To initiate the change of beneficiary, you'll need to contact your insurance company. They will guide you through their specific process, which typically involves filling out a change of beneficiary form. This form can usually be submitted online, in writing, or over the phone. The form will require personal information about the new beneficiary, such as their full legal name, relationship to you, and Social Security number.

Providing Additional Information

In some cases, you may need to provide additional information or documentation. For instance, if the change of beneficiary is due to the death of the previous beneficiary, you may need to submit a copy of their death certificate along with the form. Be sure to ask your insurance company about any other requirements or conditions that may apply.

Finalizing the Change

Once you've submitted the completed form and any necessary documentation, the insurance company will review your request. They will inform you if the change has been approved. It's important to note that you, as the policyholder, are typically the only person authorized to make this change, unless you've granted someone power of attorney or live in a community property state, in which case your spouse's permission may be required.

Informing the New Beneficiary

After the change has been approved, remember to inform the new beneficiary about the policy and let them know where to find the relevant coverage documents. This will help them navigate the claims process efficiently if needed.

When to change the beneficiary on a burial insurance policy

There are many reasons why someone may want or need to change the beneficiary on their burial insurance policy. Here are some key instances when you should consider changing the beneficiary:

• The beneficiary has predeceased the insured.
• The beneficiary is no longer suitable due to separation or divorce.
• The beneficiary has become cognitively unable to carry out their duties.
• You have a new spouse or partner and want to name them as the beneficiary.
• You have children or grandchildren and want to name them as beneficiaries.
• Your named beneficiary is a minor and you want to change it to an adult or a trust.
• Your beneficiary's circumstances have changed, and you want to ensure the money is used as intended.
• The beneficiary is no longer in your life or you have lost contact with them.
• You have had a falling out or dispute with the named beneficiary.
• You want to add or remove multiple beneficiaries.

It is important to keep your beneficiary designations up to date, especially after major life changes such as marriage, divorce, or the birth of a child. Reviewing your policy regularly and adjusting it after significant life events will help ensure that your death benefit goes to the right people.

Additionally, consider changing your beneficiary if you have any concerns about their ability or willingness to carry out their duties. This could include situations where the beneficiary is no longer capable of handling financial matters or is unlikely to use the money as you intended.

Remember, the policyholder is typically the only person allowed to make changes to beneficiaries. The process for changing a beneficiary may vary depending on the insurance provider and certain conditions may need to be met. In some cases, you may need the consent of the current beneficiary or another authorised person to make changes.

Types of beneficiaries

There are two main types of beneficiaries: primary and contingent.

Primary Beneficiaries

A primary beneficiary is the person (or persons) first in line to receive the death benefit from your burial insurance policy. This is typically your spouse, children, or other family members. You may also have more than one primary beneficiary, in which case you can specify the percentage of the payout that each beneficiary will receive.

Contingent Beneficiaries

In the event that your primary beneficiary dies before or at the same time as you, most policies allow you to name at least one backup beneficiary, known as a "secondary" or contingent beneficiary. Contingent beneficiaries will receive the death benefit if the primary beneficiaries are deceased or unable to accept the funds.

You can also have tertiary beneficiaries, who will inherit the proceeds from the insurance policy if both the primary and secondary beneficiaries pass away before the policyholder.

It is important to keep your beneficiary designations up to date, especially after major life changes such as marriage, divorce, or having children.

Frequently asked questions