What Is Beneficiary?
A beneficiary is the person or entity named in a life insurance policy (or retirement account) to receive the death benefit or proceeds when you die. You can name a primary beneficiary and one or more contingent beneficiaries as backups. Per-stirpes versus per-capita wording controls how benefits pass if a named beneficiary has died.
Why it matters
Naming beneficiaries correctly avoids probate delays and ensures money reaches who you intend. Outdated beneficiaries (e.g., an ex-spouse) are a common, costly mistake.
Common confusion
A beneficiary is not the insured person. The insured is covered; the beneficiary receives the payout.
Frequently Asked Questions
Can I change my beneficiary?
Yes, by submitting a change-of-beneficiary form to the insurer; it takes effect when recorded, not when signed.
What if I name no beneficiary?
The death benefit usually goes to your estate and through probate, which delays payment and may increase taxes.