How Does a Life Insurance Beneficiary Work?

Your beneficiary is the person — or people — who receive the death benefit when you pass away. You can name individuals, trusts, charities, or even your estate, and you can change beneficiaries at any time.

Primary beneficiaries receive the proceeds first. Contingent (or secondary) beneficiaries receive the benefit only if all primary beneficiaries have passed away. Always name a contingent — life happens.

Life insurance proceeds go directly to your named beneficiary, bypassing probate. That's a major advantage — but only if your beneficiary designations are up to date. They override what's in your will.

Common mistakes: naming minor children directly (proceeds get tied up in court), forgetting to update after a divorce or death, or leaving the beneficiary line blank. Review your designations every few years and after any major life event.