Beneficiary
Who gets the money — and why naming them carefully matters more than most people think.
The person, people, or entity you name to receive the death benefit from your life insurance policy.
Naming a beneficiary
A beneficiary is whoever you designate to receive the death benefit when you die. It can be a person, several people in shares you specify, a trust, a charity, or your estate. Naming a specific person rather than your estate has real advantages: the proceeds generally pass directly to them, bypassing probate, reaching them faster, and typically staying out of reach of the estate's creditors.
You can name a primary beneficiary and a contingent (backup) beneficiary who receives the benefit if the primary predeceases you. Keeping these designations current is one of the most overlooked parts of owning life insurance — an out-of-date beneficiary after a divorce, death, or new child is a common and painful mistake.
Revocable versus irrevocable
A revocable beneficiary can be changed by the policyowner at any time without the beneficiary's consent. An irrevocable beneficiary is much harder to change: once named, you generally need that beneficiary's consent to alter the designation, change the beneficiary, or in some cases even to access cash value or cancel the policy.
Irrevocable designations are sometimes used deliberately — for example, in separation agreements where one party must guarantee coverage for children. But they remove flexibility, so they should be chosen intentionally rather than by accident. Understanding which type you are selecting on the application prevents future headaches.
Minors and special situations
Naming a minor child directly as beneficiary can create complications, because a minor generally cannot receive insurance proceeds directly. Depending on the province, the funds may need to be paid to a court or held until the child reaches the age of majority, and control may not rest with the person you would have chosen. Using a trustee or a properly structured trust usually gives you more control.
Similar care applies when naming a dependant with a disability, or when coordinating designations with a will. Life insurance designations operate independently of a will, so the two need to be aligned. A licensed advisor, and where appropriate a lawyer, can help make sure the money ends up where and how you intend.
Common questions
Should I name my estate or a person as beneficiary?
Naming a specific person usually means the proceeds pass directly to them, bypassing probate and typically avoiding estate creditors, and they receive the money faster. Naming the estate routes the proceeds through your will, which can expose them to probate and creditors. There are cases where naming the estate makes sense, so weigh it with an advisor.
Can I change my beneficiary later?
If the beneficiary is revocable, yes — you can change it at any time without their consent. If it's irrevocable, you generally need that beneficiary's consent to make changes. Review your designations after major life events like marriage, divorce, or the birth of a child.