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Life insurance beneficiaries explained

What is a life insurance beneficiary? And who gets a life insurance payout when you die? Our helpful guide covers everything you need to know about life insurance beneficiaries. It includes who can be one and how to change them.

What is a life insurance beneficiary?

When you’re taking out a life insurance policy, the insurance company will ask you to name your life insurance beneficiary. A beneficiary is the person or people who receive your life insurance payout when you die. You can choose whoever you want to be the beneficiary. 

You can name a life insurance beneficiary in your policy, will, and/or trust. It depends on how you've set up your policy.

If you have a joint life insurance policy with your partner, they will become your beneficiary after you die.  

Who can be a life insurance beneficiary? 

Sometimes people assume the beneficiary has to be a spouse or children. But it can be anyone. It could be a long-term partner, a grandchild, a sibling, a relative, or a close friend. You can even choose charitable organisations.  

Deciding who will be your life insurance beneficiary is a big decision. Sometimes, it’s obvious who you’ll choose, but other times, it’s worth thinking about. Don’t let anyone pressure you into naming beneficiaries if you’re unsure.

There are some other things to consider when naming your beneficiary. If you name a child as a life insurance beneficiary and die before they turn 18, they won't control the payout until they are an adult. A guardian or a trust will manage their money. 

How many beneficiaries can be on a life insurance policy? 

There’s no rule for how many beneficiaries you’re allowed to have on your life insurance policy. You can choose one life insurance beneficiary if you wish. Or, you could nominate multiple people to receive a payout.

It’s worth knowing, if you have more than one beneficiary, you have to decide exactly how much each will receive. For example, if you have a spouse or civil partner and two children, you might give your spouse 50% and each of your children 25%. 

Can life insurance beneficiary be based in another country? 

It’s possible to name a non-UK resident as a life insurance beneficiary. But there are some things to keep in mind. These include policy terms, tax implications, and whether the person entitled to receive the payout has a UK bank account. 

It’s a good idea to discuss these things with your insurer. You can also consult with a tax advisor to ensure that all aspects of the policy are fully understood.

Can I change life insurance beneficiary? 

Your policy term can last for a very long time. Or even your entire life if you have a whole of life insurance policy. A lot of things can change during that time. You may get divorced or have children or grandchildren. You may want to change the life insurance beneficiary listed on your policy for any reason.

Whether you can make this change depends on if you’ve named revocable or irrevocable beneficiaries.

You can remove a revocable beneficiary from your life insurance and replace them with someone else. All you need to do is request the form from your life insurance company.

But, if you named an irrevocable beneficiary, the only way to change them is to complete the form and get their written consent.

Who gets payout if there is no life insurance beneficiary? 

If you don't name a life insurance beneficiary on your policy, your life insurance payout will become part of your estate after your death. Then, your estate, including the payout, will be split between beneficiaries named in your will. The executor of your will be responsible for this.   

If you die without a will, your estate will be divided according to intestacy laws

Do life insurance companies contact beneficiaries? 

No, the life insurance company won’t know that the plan holder has died. It’s the responsibility of the family to get in touch with the insurer.

If you’re taking out a life insurance policy, it’s a good idea to tell your family and trustees and give them your plan number. They will have to contact the provider when you die and provide evidence of your death. 

How is life insurance paid out to beneficiaries? 

Life insurance claimants receive the payout in a single lump sum. But first they need to tell the insurance provider you have died and provide a death certificate. They’ll then need to complete a claim form and provide details of the life insurance policy. 

If the plan was not placed in trust, the payout is first paid into an account held by the executor of the will. That’s the person who handles the administration of the estate. The executor will distribute the money from the estate to the beneficiaries named in the will, once they have Grant of Probate.

You may find it useful to refer to the GOV.UK bereavement guide for more information. 

Can a life insurance beneficiary be changed after death?

Life insurance beneficiaries can’t be changed once the insured person dies. If you die while a change is processing, the insurer will decide who get’s the payout. 
Find out more about Vitality life insurance

Or get a personalised Vitality life insurance quote by filling out our online form. It's quick, easy and tailored to your needs. 

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