The simple and useful definition of a life insurance beneficiary.  Whole, Term, Universal, really any type of life insurance policy or product.

The person who receives financial protection from a life insurance plan is called: a beneficiary.

The definition of a life insurance beneficiary infographic

“The Person who Receives Financial Protection (by the death benefit) from a life insurance plan (also called a life insurance policy) is called the Beneficiary. ”  There can be multiple beneficiaries, meaning more than one.   Also there can be multiple levels of life insurance beneficiaries.   This is not necessarily the same definition of beneficiary as other financial products.

The one thing to know about beneficiary designation is that each United States State has their own department of insurance.  Each department or bureau of insurance can and will have their own rule(s) that can and will change how you can set up and how you can change any potential beneficiaries.

READ ALSO:  Top 15 Money Saving Tips For 2013 (Infographic)

In general unless, you are discussing an Irrevocable beneficiary designation – then a beneficiary is typically allowed to be changed.   There are typically four parties to a modern life insurance policy which include the the policy owner, the insured, the beneficiary, and the insurer (insurance company.)   Of all of these the beneficiary is really the only one that is commonly allowed to be changed.

In order to change a life insurance beneficiary, typically you would contact the insurer and inquire about the process.   You will typically be required to fill out a policy form and sign it.  Depending on the change and state that you reside in, you may need to have your spouse sign a document as well.  Potentially the old beneficiary may need to sign as well.   Don’t forget to follow up with the insurance company to confirm that the change was actually made.

READ ALSO:  Ireland: An Aging Country

There are other rules more detailed information about beneficiaries, but this information is a great place to start.

Loading