Life Insurance 101 - Beneficiary Basics


When you take out a life insurance policy on yourself, you are required to name at least one person or organization as your beneficiary. This designee would receive the proceeds from your policy, if you were to pass away.

Did you know, there are different types of beneficiaries? Below I’ve outlined several for you:

  1. The first type of beneficiary is the primary beneficiary. This person or organization (such as a trust) would be the first to be entitled to the proceeds from your life insurance if you were to pass away. There can be more than one primary beneficiary. You can have as many as you want as primary beneficiary. Most life insurance carriers want a percentage that each individual would receive. For example: Mary gets 50% and Bob gets 50%. Or you could have 10 individuals at 10% each. As long as the percentages total to 100%. They could be your spouse, children, grandchildren, relative or a trust, as mentioned above.
  2. The second type of beneficiary is the contingent beneficiary. This type of beneficiary would only receive the proceeds from your life insurance upon your death if the primary beneficiary or beneficiaries have also passed away. Same as the primary, you are able to list as many as you want as long as the percentages total the 100% for splitting up the proceeds.
  3. You can have revocable beneficiaries; this would mean that the policy owner would have the right to change the beneficiary or beneficiaries at any time if he or she wanted to. 
  4. You can also have irrevocable beneficiaries. They are usually used for a trust and estate planning purposes. This means the owner is not able to change the beneficiary without consent from that beneficiary or beneficiaries.

About the author: Pam Fortier has been in the life insurance business for over 30 years. She also holds both a LUTCF designation and a CISR designation. Pam is adept at helping clients select the coverage they want at the price they can afford. You can contact Pam at 1-800-651-1953 or