How to Change the Beneficiary on a Life Insurance Policy

Changing the beneficiary on a life insurance policy allows policyholders to ensure their death benefit proceeds are distributed according to their current wishes. Life circumstances often change, making it important to periodically review and update who will receive financial support from your policy. This adjustment involves a formal procedure with the insurance provider, ensuring accuracy and legal validity. Updating your beneficiary designation helps prevent complications and ensures your loved ones are protected as intended.

Understanding Beneficiary Designations

Life insurance policies involve different types of beneficiary designations, affecting how death benefits are paid and how easily changes can be made. The person or entity first in line to receive policy proceeds is the primary beneficiary. A spouse or child is often named as the primary recipient. If the primary beneficiary cannot receive the proceeds, such as due to passing away before the policyholder, the contingent beneficiary becomes next in line. Naming both primary and contingent beneficiaries helps prevent the death benefit from going through probate, which can cause delays and additional costs.

Beneficiary designations are categorized as either revocable or irrevocable, dictating the policyholder’s ability to make future changes. A revocable beneficiary can be changed at any time by the policyholder without the beneficiary’s consent. This offers flexibility, allowing updates for life events such as marriage, divorce, or the birth of a child. Most policies default to a revocable designation, providing the policy owner control over their insurance plan.

Conversely, an irrevocable beneficiary designation cannot be changed without the written consent of that named beneficiary. This provides the irrevocable beneficiary a secured right to the policy’s death benefit. While less common, this designation might be used in situations like divorce settlements or business agreements to guarantee a payout. Altering a policy with an irrevocable beneficiary requires their explicit approval, making the modification process more involved.

Gathering Necessary Information

Before initiating a beneficiary change, gather all required details for both the policy and the new beneficiaries. You will need your life insurance policy number to identify your coverage with the insurer. Your full legal name as the policyholder is also necessary for verification.

For each new primary and contingent beneficiary, gather their complete legal name and relationship to you (e.g., spouse, child, or trust). Their full date of birth and Social Security Number (SSN) or Taxpayer Identification Number (TIN) are required for identification and processing. Have their current mailing address, phone number, and email address readily available. If naming multiple beneficiaries, determine the specific percentage of the death benefit each should receive, as these allocations must total 100%.

The Change Process

Once all necessary information has been gathered, begin the process of changing a life insurance beneficiary by contacting your insurance provider. You can reach the insurer through their customer service line, online portal, or by contacting your insurance agent. They will guide you on how to obtain the official Beneficiary Change Form. Many insurers offer this form for download from their website, or you can request it be mailed.

After acquiring the form, carefully complete all sections using the information gathered. Ensure that legal names, dates of birth, Social Security Numbers, and specified percentages for each beneficiary are accurately entered. If changing an irrevocable beneficiary, their signature will also be required on the form to validate the change. Some forms may require a witness signature, typically from someone not named as a beneficiary and over 18 years old.

Upon completing and signing the form, submit it to your insurance company. Submission methods vary by insurer and may include mailing the original form to a designated address, uploading it through an online portal, or submitting it via fax or email. After submission, follow up to confirm that the change has been processed. Insurers provide a confirmation notice, often by mail or email, indicating that the beneficiary update is complete and effective. This confirmation ensures your policy reflects your current wishes.