top of page
  • Writer's pictureSteve Greenberg

DYK: Beneficiary Considerations

You should be sure that your beneficiary designations accomplish what you want and do not create problems for the people you leave behind. Many people name a beneficiary when they first enroll in a company-paid group term life insurance program and then forget about it.

As the years go by, relationships start and end. There's marriage, divorce, children being born, and more. All reasons to update your beneficiary. Did you really want to leave your life insurance benefits to your ex-spouse, ex-partner, or former friend?

Here are a few considerations when designating and reviewing your beneficiaries:

  1. Naming a Minor Child: Life insurance companies will not pay proceeds directly to minors. If you have not named a guardian in your will or created a trust, the court will appoint a guardian. You might be better off naming an adult who will care for the child or setting up a trust to benefit the child naming the trust as the beneficiary. You should consult with an attorney to decide what to do.

  2. Naming a Person with Special Needs: The life insurance proceeds may disqualify the recipient from government assistance.

  3. Using Your Will to Designate Beneficiaries: Regardless of who your will designates, the proceeds will be paid to the beneficiary on file with the insurance company.

  4. Failing to Update Beneficiaries: You should review your beneficiaries after life events like marriage, having or adopting children, divorce, and deaths.

  5. Not Naming Beneficiaries Specifically: You should name your beneficiaries and not use generalizations like “all my children”.

  6. Failing to Notify Your Beneficiary About Your Life Insurance: Too many people do not talk about life insurance. You do not want this to be a surprise.

  7. Naming Just One Primary Beneficiary: If your primary beneficiary predeceases you or if you die at the same time, naming a secondary beneficiary will avoid having the proceeds go into your estate.

If you are unsure of who you've designated, please don't hesitate to reach out to us by email or phone (203-387-2266). Remember that you can change your beneficiary at any point in time; it is not a once per year process during your employer's Open Enrollment.


bottom of page