Can you change your life insurance beneficiary?
Changing a life insurance beneficiary is an important part of owning a life insurance policy, and the life insurance beneficiary change process isn't complex. Read on to learn how to change a life insurance beneficiary and understand why you might want to change it.
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Zach Fagiano
Licensed Insurance Broker
Zach Fagiano has been in the insurance industry for over 10 years, specializing in property and casualty and risk management consulting. He started out specializing in small businesses and moved up to large commercial real estate risks. During that time, he acquired property & casualty, life & health, and surplus lines brokers licenses. He’s now the Senior Vice President overseeing globa...
Licensed Insurance Broker
UPDATED: Jun 2, 2023
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Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.
UPDATED: Jun 2, 2023
It’s all about you. We want to help you make the right life insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance company and cannot guarantee quotes from any single company.
Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- A life insurance beneficiary change is often needed following marriage, divorce, and other life changes and can be done at any time as long as the policy is active
- With few exceptions, only the policy owner can make changes to your life insurance beneficiaries
- The process of changing a beneficiary varies depending on whether you have a revocable or irrevocable beneficiary
The short answer to the question, “Can you change my life insurance beneficiary?” is yes, with several parameters. However, it’s important to also know how to choose a life insurance beneficiary to ensure the policy functions as intended and offers financial protection to your loved ones.
Many life events can warrant a beneficiary change, including marriage and divorce, the birth or adoption of a child, purchasing a home, setting up a new trust for an estate plan, or the death of an existing beneficiary.
Understanding what a life insurance beneficiary is and how to change a life insurance beneficiary helps simplify this process and empower you to make these major decisions.
Understanding Life Insurance Beneficiaries
A life insurance beneficiary is a person who receives the death benefit when you pass away, often a spouse, significant other, or dependents. A life insurance beneficiary can also be an organization, trust, or other non-individual.
Some examples of non-individual beneficiary options include:
- Your estate
- A charitable organization that is meaningful to you
- A legal entity, like your business or company
- A life insurance trust
Many people assume that life insurance isn’t for them because they don’t have a spouse or children. However, if you’re recently divorced or your spouse recently passed away, consider these alternative options for making a lasting difference in a meaningful way to you. Learn more about how to handle a life insurance policy after a divorce.
It’s also worth noting that it often makes sense to designate multiple people or entities as beneficiaries and divide the death benefit based on the corresponding financial needs.
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How to Change a Life Insurance Beneficiary
As the policyholder, only you can change the beneficiary on your life insurance policy, with a few exceptions.
For example, suppose there is an irrevocable beneficiary listed on the policy, or you live in a community property state. In that case, you may need another person’s permission before making this change. An individual you have given power of attorney may also change the beneficiary on your policy.
These circumstances are discussed in more detail below.
Irrevocable Life Insurance Beneficiaries
Changing the beneficiary is a little more complex if a life insurance policy has an irrevocable beneficiary designation. An irrevocable beneficiary can’t be removed or have their portion of the death benefit changed without their consent. Additionally, an irrevocable beneficiary must be notified if the policy gets canceled. Read more about how to cancel your life insurance policy.
So, why choose an irrevocable beneficiary? Sometimes, you might use one to guarantee that a particular person or organization will receive the death benefit. However, remember the difficulty of changing the beneficiary when you choose this for your life insurance policy.
Changing Beneficiaries in a Community Property State
Like an irrevocable beneficiary, spouses also have this type of decision-making authority in many states. A handful of community property states require the spouse’s permission to make a beneficiary change, including:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
In a community property state, assets acquired during the marriage are considered equally owned by each spouse, and life insurance policies fall within the category of community property.
In this case, if the life insurance policy took effect after you got married, you’ll need your spouse’s permission to name someone other than them as the beneficiary on your policy. Read more about life insurance for families.
Revocable Life Insurance Beneficiaries
Suppose you don’t have an irrevocable beneficiary on your policy and are investigating options for changing the current beneficiary. In that case, you’re likely wondering who has the right to change a revocable beneficiary.
The good news is that “revocable” means you can change your beneficiary.
When can a policyholder change a revocable beneficiary? A beneficiary change can occur any time after the policy is in force. If the policy is still active and hasn’t been paid out, you can request a change of beneficiary.
How to Choose a Life Insurance Beneficiary
Your beneficiary should be someone you trust to use the funds to take care of final expenses, debts, and ongoing bills like the rent or mortgage, child care and higher education costs, and other important financial necessities once you die.
In most cases, you can select multiple beneficiaries, known as primary, secondary, and successor beneficiaries. The primary beneficiary is the person designated to receive the death benefit when you pass. A secondary beneficiary, often called a contingent beneficiary, will receive the death benefit if the primary beneficiary is deceased at the time of the payout.
Naming Your Children as Beneficiaries
Dependents cannot access life insurance benefits unless they are 18 or older. Therefore, minors will need to wait until they become a legal adult unless a guardian gets appointed to access the funds on their behalf.
Electing a guardian or setting up a trust are two ways to be sure the funds get used for your minor children’s needs. Learn more about how to name a minor child as a life insurance beneficiary below.
Appointing a Guardian
Appointing a legal guardian to manage a life insurance payout is a common way of designating minor children as beneficiaries. By selecting a guardian as the beneficiary on behalf of your dependents, the money must be used in their interest, and they can access the funds sooner than they otherwise would without a guardian.
The person who would take custody of your kids if you died is often the best person to designate as a guardian on your life insurance.
Establishing a Trust
Setting up a trust is another way to make sure the life insurance benefit goes to your children through the trust. While appointing a guardian only requires the potential guardian’s willingness, a trust generally has a cost associated with setup. Typically, fees are required upfront, and a trustee must be named to facilitate the payout. Read more about life insurance for children.
Rather than receiving a single payout like most life insurance policies, a trust can disperse the death benefit at set times and in certain amounts you predetermine as the policy owner. However, just as a life insurance policy needs to be active at the time of death, a trust must also be in good standing for it to function as intended when you pass.
Helpful Tips for Heirs and Beneficiaries
You don’t need to stay with the deceased’s firm as an heir or beneficiary once the life insurance policy gets paid out. However, if assets or investments are involved, do your due diligence before adding new ones or making any transfers.
Potential Tax Consequences for Changing Beneficiaries
If you’re wondering whether life insurance is taxable, the answer is no. Life insurance polices don’t get taxed when paid to a beneficiary or if the beneficiary gets modified. However, in some cases, the life insurance benefit can be considered part of the policyholder’s estate and may be calculated as part of the taxable estate value.
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More About How to Change a Life Insurance Beneficiary
Can you change your life insurance beneficiary? Life insurance is meant to protect those you care about most, so changing a life insurance beneficiary may be necessary after a divorce, when loved ones pass away, and any other significant life changes.
Reviewing your policy periodically is a proactive way to ensure that the designated beneficiary still makes sense for your current life circumstances. With only minimal limitations in most cases, the power to change your beneficiary at any time lies with you.
Frequently Asked Questions
Can a beneficiary be removed from a life insurance policy?
Yes, a beneficiary can be removed by the policy owner or someone the policy owner gave power of attorney.
Can you change life insurance beneficiaries after someone dies?
You can’t change beneficiaries after the insured person dies. If they died while a change was processing, the insurer decides who to pay out.
Can life insurance beneficiaries be changed at any time?
Yes, the policyholder can change their beneficiaries whenever they want, for any reason.
When do you need permission to change a policy’s beneficiaries?
If you live in a community property state you may need your spouse’s approval to name a beneficiary other than them. If you have an irrevocable beneficiary, you need their sign-off to remove them from your policy.
What’s the process for changing a life insurance beneficiary after a divorce?
To change your life insurance beneficiary after a divorce, you typically must send a written request to your insurer, alongside documentation like a divorce decree or court order.
How often can I change my life insurance beneficiary?
Generally, you can modify beneficiaries on your life insurance coverage as often as you’d like, provided you follow the policy’s terms and procedures for the life insurance beneficiary change process.
Does changing your life insurance beneficiary cost money?
Generally, it doesn’t cost money to change your life insurance beneficiary.
Do I need a reason to change my life insurance beneficiary?
No, you don’t need to provide a reason to change your life insurance beneficiary.
What are the steps to update a life insurance beneficiary?
Modifying beneficiaries on your life insurance policy usually requires completing forms for the life insurance beneficiary change process and sending necessary documents to your insurer.
Your life insurance quotes are always free.
Secured with SHA-256 Encryption
Zach Fagiano
Licensed Insurance Broker
Zach Fagiano has been in the insurance industry for over 10 years, specializing in property and casualty and risk management consulting. He started out specializing in small businesses and moved up to large commercial real estate risks. During that time, he acquired property & casualty, life & health, and surplus lines brokers licenses. He’s now the Senior Vice President overseeing globa...
Licensed Insurance Broker
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.