Changing Government Life Insurance Beneficiaries: Where To Go?

Choosing a beneficiary for your government life insurance is an important decision, and it's essential to keep your designation up to date. While it's not mandatory to name a beneficiary, it's usually the primary reason people buy life insurance – to provide for loved ones after they're gone. If you don't designate a beneficiary, a court will decide who gets the money, which can cause delays in benefit payments. To change your beneficiary, you can submit a new form, but this varies depending on your insurance provider and location. For example, Servicemembers can now manage their beneficiaries using the SGLI Online Enrollment System (SOES), while those with a VA Life Insurance policy can update their beneficiary through the Online Policy Access website.

Online vs. in-person

Changing the beneficiary of your government life insurance policy is an important step in ensuring your benefits are paid to your desired recipient. While the process of changing beneficiaries may vary depending on the specific type of government life insurance you have, there are generally two methods to do so: online or in-person.

Online

Changing your beneficiary online is often the fastest and easiest way to update your beneficiary information. For instance, if you have Servicemembers' Group Life Insurance (SGLI), you can use the SGLI Online Enrollment System (SOES) to make changes to your beneficiary information without completing a paper form or visiting an office in person. Similarly, if your VA Life Insurance policy number begins with V, RH, J, RS, K, or W, you can update your beneficiary through the Online Policy Access website after creating an online account.

In-person

Updating your beneficiary information in person typically involves completing and submitting the appropriate paper forms. For example, if you have a VA Life Insurance policy, you can download and complete Form 29-336, Designation of Beneficiary and Optional Settlement, and mail it to the provided address. This form must be signed by the policyholder and witnessed by two disinterested parties who are not beneficiaries. If you are a member of the Public Health Service or have part-time SGLI coverage, you will need to use the SGLV 8286 form and submit it to your branch of service personnel office.

It is important to note that some life insurance providers, such as OPM, do not maintain beneficiary information online, and you may need to request a copy of your retirement file to check your current beneficiary designation. Additionally, certain life events, such as marriage, divorce, or the birth of a child, may trigger a review of your beneficiary information. Therefore, it is recommended to review and update your beneficiary information regularly to ensure it aligns with your wishes.

Choosing a primary beneficiary

You can choose more than one person to be a primary beneficiary and receive your life insurance benefits. If you decide to choose multiple people as beneficiaries, you will need to decide how much of the death benefit each person will receive. You can choose between a specific percentage, per stirpes, or per capita. With a specific percentage, each of your named beneficiaries will receive a certain percentage of your life insurance death benefits.

When choosing a primary beneficiary, it is important to consider the beneficiary's age. Naming a minor as a primary beneficiary is often not advised as insurers typically do not disburse policy proceeds directly to minors. If you die while they are still minors, the proceeds may be sent in their name to the legal guardian of the minor child's estate. A common solution to this is to create a trust and name the trust as the beneficiary. This way, the funds can be used for the child's benefit while they are still minors.

It is also important to keep your beneficiary designations up to date as your life changes. Certain life events, such as marriage, the birth of a child, or divorce, should trigger a review of your beneficiary information. This will ensure that your benefits are paid to the person or entity you want to receive them and save your family members unnecessary grief in the future.

Choosing a contingent beneficiary

You can name multiple contingent beneficiaries and divide your estate among them in whatever percentages you choose. For instance, you may name your spouse as the primary beneficiary and your two children as dual contingent beneficiaries, with each child receiving a portion of your estate. If your spouse predeceases you, your children will receive your assets following your death.

It is a good idea to include at least one contingent beneficiary. Without one, your assets could enter probate, which can delay the benefit payment and increase the risk of death benefit proceeds going to your estate, potentially increasing the chance for estate taxes. While it is not mandatory to name a beneficiary, it is usually the reason people buy life insurance in the first place – to provide a benefit to the people they care about.

You can name anyone as your contingent beneficiary, including friends, family members, or charities. However, if you name minor children as beneficiaries, even contingent ones, you will need to select a custodian to manage the payout funds until the children come of age. It is recommended that you discuss your wishes with your beneficiaries in advance to reduce the chance of things becoming complicated after you pass away.

The process of updating your beneficiary information will depend on the specific type of government life insurance you have. For example, if you have Servicemembers' Group Life Insurance (SGLI), you can now manage your coverage and beneficiary information using the SGLI Online Enrollment System (SOES).

When to change your beneficiary

Choosing a beneficiary for your government life insurance is an important decision, and it's equally important to keep your beneficiary designations up to date. While you may not need to change your beneficiary, it's a good idea to review your choice at least once a year.

Life is full of changes, and certain events may trigger a review of your beneficiary information. For example, if you get married, divorced, or have a child, you may want to update your beneficiary to reflect these changes. You may also want to change your beneficiary if your primary beneficiary passes away, as their contingent beneficiary would then receive the death benefit.

If you have named a previous spouse as the beneficiary and have since remarried, you may want to update the beneficiary to your current spouse. Similarly, if you have young children or minors who depend on you, you may need to update your beneficiary if they reach the age of majority or become financially independent.

In addition to life events, you may also want to change your beneficiary if your beneficiary's contact information or address has changed. This will ensure that your family can avoid any unnecessary grief and quickly file a claim to receive the benefit.

To change your beneficiary, you will need to contact your insurance company and follow their specific process. 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. It's important to keep your beneficiary designations up to date to ensure that your wishes are honoured and the death benefit payout goes to the intended recipient.

How to change your beneficiary

Choosing a beneficiary is an important part of owning a life insurance policy. A beneficiary is the person or entity that you legally designate to receive the benefits from your policy or accounts when you die. While it is not mandatory to name a beneficiary, it is usually the reason people buy life insurance in the first place—to provide a benefit to the people they care about.

If you don't designate a beneficiary, it may be unclear who is entitled to the funds, which can delay the benefit payment. In such a case, the funds will be distributed according to the order of precedence.

You can change your beneficiary at any time. However, in specific cases, policyholders need approval to make a change. If you live in a community property state and bought your policy after you got married, you’ll need your spouse’s permission if you plan to name someone other than them as your beneficiary. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

If you have an irrevocable beneficiary, you will also need approval to make a change. Irrevocable beneficiaries are rare and are usually named as part of a prenuptial agreement.

To change your beneficiary, you can submit a new form. This will take precedence over any previous designation form on file, as long as you sign it, have two witnesses sign, and complete the rest of the form properly. You can also change your beneficiary online in some cases.

Frequently asked questions