Beneficiary designations are one of the most important parts of a life insurance contract, yet they are easy to ignore after a policy is purchased. The NAIC recommends reviewing beneficiaries after major life changes and periodically checking that names and contact information remain current.
Primary vs. contingent beneficiaries
The NAIC describes two main beneficiary categories. Primary beneficiaries receive all or a stated portion of the death benefit if they outlive the insured. Contingent beneficiaries, sometimes called secondary beneficiaries, receive proceeds if the primary beneficiary is not able to receive them under the policy terms.
| Designation | Role |
|---|---|
| Primary beneficiary | First person or organization designated to receive the death benefit |
| Contingent beneficiary | Backup beneficiary if the primary beneficiary does not receive the proceeds |
| Multiple beneficiaries | Can divide the benefit by stated percentages or another valid allocation method |
| Estate or trust | Can be named, but legal, tax and administration consequences should be reviewed with qualified advisers |
Can you name more than one beneficiary?
Yes. The NAIC notes that a policy can name multiple beneficiaries. The designation should clearly state the percentage of proceeds for each person or specify an allocation such as equal shares if the insurer’s form permits it.
Check the total carefully. Ambiguous percentages, outdated names or missing contingent beneficiaries can complicate administration when the claim is eventually filed.
Why a will does not automatically update a life insurance policy
Life insurance is paid according to the policy’s beneficiary designation and applicable law. The NAIC explains that a will generally does not control life insurance proceeds unless the estate itself is the beneficiary. That is why updating an estate plan without updating the insurance contract can produce an unintended result.
When should you review beneficiaries?
- Marriage or remarriage. Confirm the person named on the policy still reflects your intent.
- Divorce or separation. State law and court orders can affect rights, so obtain qualified legal advice before making assumptions.
- Birth or adoption. Review how a minor beneficiary would receive and manage proceeds.
- Death of a beneficiary. Update the primary and contingent designations.
- Major estate-plan changes. Make sure the life policy, trust and other planning documents work together.
- Annual policy review. Verify names, addresses and contact details.
Be careful when naming a minor
Insurance companies may not simply hand a large death benefit directly to a minor. The NAIC suggests considering a trust or estate-planning arrangement when a minor is involved. The right structure depends on state law and family circumstances, so legal advice can be important.
What beneficiaries should know now
The NAIC encourages policyholders to make sure beneficiaries or trusted advisers know that the policy exists, which insurance company issued it and where policy records are stored. Beneficiaries can lose time simply because they do not know where to start.
The NAIC Life Insurance Policy Locator can help search participating life insurers and annuity companies when a beneficiary believes a policy exists but cannot locate the carrier or contract.
Common beneficiary mistakes
- Leaving an ex-spouse, deceased relative or outdated contact information on the policy.
- Naming only one beneficiary with no contingent beneficiary.
- Using vague relationship labels instead of the person’s legal name.
- Failing to specify percentages when multiple beneficiaries are named.
- Assuming a will overrides the policy designation.
- Failing to coordinate minor beneficiaries, trusts and estate planning.
How beneficiaries make a claim
After the insured dies, a beneficiary usually contacts the insurer, provides claim documentation and follows the carrier’s process. Requirements vary, but beneficiaries should expect to identify the policy, prove the death and provide identity and payment information.
Do not send original documents unless the insurer specifically requires them, and keep copies of everything submitted.
Frequently asked questions
Can I change my life insurance beneficiary?
In many policies the owner can change a revocable beneficiary by following the insurer’s formal process. Irrevocable designations and legal orders can be different.
What is a contingent beneficiary?
It is a backup beneficiary who can receive policy proceeds when the primary beneficiary does not receive them under the policy terms.
Can I name a charity or trust?
The NAIC notes that beneficiaries can include individuals or organizations, and policies can also be coordinated with trusts or estates. Obtain legal or tax advice for complex planning.
What if I cannot find a deceased person’s policy?
The NAIC Life Insurance Policy Locator may help connect beneficiaries with participating insurers that find a matching policy or annuity contract.
Sources & further reading
Reviewed against NAIC life-insurance guidance in September 2026. Beneficiary rights can be affected by contract terms, state law, court orders and estate-planning choices.
