The beneficiary is the person or entity that receives the death benefit. The designation on the policy generally controls who is paid, so it deserves care.
A primary beneficiary is first in line. A contingent beneficiary receives the money if the primary has died. Naming both keeps the proceeds out of your estate, where they could be delayed by probate.
Common mistakes
A few oversights cause most of the problems.
Naming a minor child directly, which can require a court-appointed guardian
Forgetting to update the form after marriage, divorce or a death
Naming your estate without a reason to
Using vague descriptions instead of full legal names
Taxes
Life insurance death benefits are generally not subject to federal income tax for the beneficiary. There are exceptions, and estate or state taxes can apply, so speak with a tax professional about your situation.
Common questions
Can I change my beneficiary?
With a revocable designation, which is the usual kind, you can change it at any time by filing a form with the insurer.
This page is general information, not insurance, legal or tax advice. Policy terms, eligibility and pricing vary by insurer and state. A licensed insurance agent can explain the specific products they offer.