Who is considered the next of kin for life insurance?

Who is considered next of kin for life insurance companies and what are next-of-kin rights? Life insurance companies generally do not need to recognize your next of kin if you list beneficiaries.

Generally, next of kin is a legal term that determines who inherits a person’s property or who makes funeral arrangements if you die intestate (without a will).

Your permanent life insurance policy is part of your estate, but only your named beneficiaries will receive the proceeds outside of one exception.

Read on to know more about next of kin and how it is connected to life insurance. When you are ready to see rates from top life insurance companies in your area, enter your ZIP code into our free quote tool above.

What is next of kin order?

If you take out a life insurance policy without naming beneficiaries, the proceeds will go to eligible blood relatives based on who is next of kin. This is the general order:

1. Your spouse (or domestic partner)
2. Adult child (even if adopted)
3. Parent
4. Adult sibling
5. An adult grandchild
6. An adult niece or nephew
7. Grandparent
8. Aunt or uncle
9. Adult first cousin
10. Great grandparent
11. Great-aunt or great-uncle
12. Adult second cousin

From there, the next of kin depends on the descending order of your blood relatives. In the cases where a minor child is your only living relative, their current guardian may act on their behalf when it comes to making legal decisions regarding your estate. Otherwise, the order goes to the next eligible person.

In most cases, none of your spouse’s relatives can be next of kin. However, some states might recognize your in-laws in the next-of-kin order.

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Who can you list as next of kin for life insurance purposes?

You generally do not need to list a next of kin for a life insurance policy. Just list a beneficiary.

Again, life insurance policies allow named beneficiaries to share in your plan. You may name a beneficiary who is not related to you, including a domestic partner. In some cases, your beneficiary is the policyholder. They can make changes to a life care plan, but only with your permission.

Now, your spouse may split the proceeds of your life insurance policy even if did not name them, provided you both live in a community property state. However, your spouse can opt out of this provision by signing a waiver.

How do different states interpret the next-of-kin order?

There are no federal next-of-kin laws in the United States, so it falls on the individual states. The next-of-kin order differs slightly from state to state, but they generally follow the order listed above.

The differences in next-of-kin laws in individual states are too numerous to name, but we can say that nine states are full community property states:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

Alaska, South Dakota, and Tennessee allow married couples to opt into community property rules. In those states, you and your spouse can separate debts and assets to decide what you will share. Moreover, you have the option to create a life insurance trust to manage assets that you intend to designate as community property.

States’ Recognition of Domestic Partnerships

Not all states recognize domestic partnerships. That means your domestic partner is not entitled to the proceeds of your life insurance policy unless they are a named beneficiary.

Other Next-of-Kin Notes Among States

Maine follows a clear order, except the Maine legislature enumerates an Adjutant General or someone that the Adjutant General designates for a veteran.

These are notable wrinkles regarding who is next of kin in North Carolina law:

• Some states do not recognize estranged/formally separated spouses in the next-of-kin order, but North Carolina is a state that does.
• The order only goes as far as your adult siblings.
• North Carolina allows a person you designate to serve as your next of kin, and that person can be at the top of the order.

Compare that to the state of Virginia, which recognizes a full order of blood relations and is more specific for a non-related adult who can act as your next of kin:

• That person may not be a healthcare professional who works at the facility where you are receiving care.
• The person must have shown special care for you and your condition.
• The person knows your religious beliefs, values, and preferences.

You may need to check with your state to know about the intricacies of the law.

How to establish next of kin

If you want to make sure that the right person will inherit proceeds from your life insurance policy, you need to be proactive.

• First, choose a life insurance beneficiary.
• Make a living will if you are in declining health.
• Draft a normal will to transfer your other assets to beneficiaries if that is what you want.
• Make your healthcare preferences known in writing so you receive the care you desire.

Now you know whether next of kin exists for health insurance and what your next of kin’s rights are regarding your health care.

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Case Studies: Next of Kin in Life Insurance

Case Study 1: The Importance of Naming a Beneficiary

In this case study, John Smith, a policyholder without a named beneficiary, passed away. As a result, the life insurance company had to determine the next of kin to distribute the proceeds. The next of kin order, which generally follows the spouse, children, parents, siblings, and other blood relatives, was applied in this case.

Ultimately, John’s children became the beneficiaries of his life insurance policy. This case highlights the significance of naming a beneficiary to ensure the intended recipient receives the benefits.

Case Study 2: Community Property State Considerations

Sarah and David, a married couple living in a community property state, had a life insurance policy in place. Although Sarah was not listed as the beneficiary, she was entitled to split the proceeds of the policy due to the community property laws in their state.

However, spouses in community property states have the option to waive this provision. David signed a waiver, and the full proceeds of the policy were paid to the named beneficiary, their daughter Emily. This case demonstrates the impact of community property laws on the distribution of life insurance proceeds.

Case Study 3: State-Specific Next-of-Kin Order

In this case study, Mary, who resided in North Carolina, passed away without naming a beneficiary for her life insurance policy. According to North Carolina law, the next of kin order follows the spouse, children, parents, siblings, and other blood relatives.

However, North Carolina also recognizes a non-related adult who can act as the next of kin under certain circumstances. In Mary’s case, her longtime friend Jennifer, whom she designated as her next of kin, received the life insurance proceeds. This example highlights the variations in next-of-kin laws among different states.

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