How Many Beneficiaries Should Life Insurance Have?

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Life insurance is traditionally passed through beneficiary designations.

Having an income is essential to living in America.

Bills must be paid.

Groceries must be purchased.

Consequently, families who lose a parent with a paycheck are left more vulnerable.

According to a recent yahoo! finance article titled “What happens if your life insurance beneficiary dies before you?,” life insurance helps replace some of the lost income.

It is a unique financial product.

Life insurance should have multiple beneficiaries.
There is no magic number for how many beneficiaries a life insurance policy should have.

Because life insurance policies have beneficiary designations, recording the name of someone you want to protect or support financially when you die is important.

Common selections include spouses, children, family members, friends, and charitable organizations.

Are you done once you have recorded a primary beneficiary?


Life events can undermine your plan if your beneficiary precedes you in death.

What should you do?

Name multiple contingent beneficiaries.

If you name only one, there is a greater chance of this person also dying and undermining your estate plan.

What happens if you die without a living beneficiary for your life insurance policy?

The policy proceeds will likely become part of your probate estate.

What does this mean?

The payout amount will be subject to probate and available to any creditors.

Claims can be made on your insurance policy from student loans, a home mortgage, debts to the IRS, or other obligations.

Additionally, your loved ones may find themselves in an estate battle over the assets.


These scenarios can be easily prevented by simply naming a secondary and perhaps even a tertiary beneficiary on the life insurance policy.

What happens if you have more than one primary beneficiary and one dies?

That depends on which Latin expressions apply, per capita or per stirpes.

Translation, please?

Consider this example when two primary beneficiaries are named, and one dies.

With per capita, the remaining primary beneficiary will receive everything.

With per stirpes, the children of the decedent beneficiary will inherit that designated portion.

What happens if the charitable organization you named as a beneficiary is absorbed by another organization or shuts down?

Several possibilities could occur.

First, the death benefit could be subject to probate after being paid to your estate.

Second, the new umbrella organization could claim the benefit on behalf of the nonprofit it absorbed.

You should be open with your beneficiaries about your life insurance policies.


When you die, they must contact the insurance company and will likely need to provide a copy of the policy.

It is also helpful to discuss with your estate planning attorney your wishes for your life insurance policy to ensure the beneficiary designation aligns with your comprehensive estate plan.

Referenceyahoo! finance (September 5, 2023) “What happens if your life insurance beneficiary dies before you?”

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