Can there be more than one primary beneficiary? Yes. If the policyholder would like to name multiple beneficiaries to a single policy, he or she can specify any number of “co-beneficiaries.” When multiple beneficiaries are listed, insurance companies can split the same death benefit amongst them.
The primary beneficiary is the person or persons selected to receive the death benefit (contributions and interest) in the event of your death. The contingent beneficiary is the person or persons selected to receive the benefit if the primary beneficiary is not alive at the time of your death.
When you create an estate plan in California, you'll list a primary beneficiary as the person who will inherit your assets. Naming them as the primary beneficiary in your will ensures they are the legal recipient. You can also name a secondary beneficiary when estate planning.
The secondary beneficiary gets your payout in the event both you and your primary beneficiary die at the same time—say, together in an accident. Without a contingent beneficiary, your payout would likely go to your estate (see above), not directly to someone you would want to have it.
Multiple beneficiaries
For example, if you name your spouse, child and a local charity as primary beneficiaries, you might allocate 50% to your spouse, 30% to your child and 20% to the charity. No matter how you divide a life insurance payout among beneficiaries, the percentages must add up to 100%.
There are two types of beneficiaries: primary and contingent. A primary beneficiary is the person (or persons) first in line to receive the death benefit from your life insurance policy — typically your spouse, children or other family members.
A will won't supersede the beneficiaries listed on a life insurance policy. In most cases, the beneficiary listed on the life insurance policy has the right to claim the payout regardless of the instructions in the will.
Estranged relatives or former spouses – Family relationships can be complicated, so think carefully if an estranged relative or ex-spouse really aligns with your wishes. Pets – Pets can't legally own property, so naming them directly as beneficiaries is problematic.
While you only need to have one beneficiary, we recommend multiple. If the entire death benefit goes to one person and they have already passed away or are otherwise unable to accept it, the proceeds revert back into your estate and may go through probate, where the court decides how the funds are distributed.
Can I have multiple beneficiaries? Yes, there is no limit to the number of POD beneficiaries allowed on an account. Each POD beneficiary will receive an equal share of the assets in an account at the time of the passing of the last owner on the account.
Your primary beneficiary is first in line to receive your death benefit. If the primary beneficiary dies before you, a secondary or contingent beneficiary is the next in line. Some people also designate a final beneficiary in the event the primary and secondary beneficiaries die before they do.
Beneficiaries can be either primary beneficiaries (who are named in the trust deed) or general beneficiaries (who often are not named individually).
If your life insurance beneficiary dies before you, the payout may go to a contingent beneficiary or your estate, depending on how you set up the policy. You can choose how death benefits are distributed using methods like per stirpes or per capita.
There is no contingent beneficiary: If you don't name a secondary beneficiary and your primary beneficiary passes before you do, the death benefit goes to your estate and through probate. You and the primary beneficiary die at the same time: The insurance company will try to determine who passed first, if possible.
Yes. You may name as many primary beneficiaries as you want, as long as you indicate the desired percentage of distribution. For example, if you name two children, you may want to show that each of them is entitled to 50% of the benefit. You may also list contingent beneficiaries as well.
If one of multiple beneficiaries dies
If you named more than one primary beneficiary and one of them dies, the remaining beneficiaries would be entitled to the death benefit. Typically, they'd each receive the same amount of money, but you can request a different type of distribution if you'd like.
The primary disadvantage of naming a trust as beneficiary is that the retirement plan's assets will be subjected to required minimum distribution payouts, which are calculated based on the life expectancy of the oldest beneficiary.
If no beneficiary is named in the policy, the terms of the policy itself will dictate where the proceeds should go, such as to the insured's next of kin or into their estate, where it will be distributed according to the insured's estate plan or California laws of intestacy if the insured left no will.
If the estate does not have sufficient funds to fulfill these financial obligations, beneficiaries' inheritances could potentially be reduced or eliminated.
However, if you have been named a beneficiary and your siblings have not, you will not be legally required to designate any portion of the life insurance payout to them.
As a standard life insurance beneficiary rule, you must explicitly identify each beneficiary with their full name and Social Security number. Pro tip: Do you live in a community property state? If so, you'll need your spouse's consent to designate a primary beneficiary other than them.
Most life insurance policies will not allow you to directly leave money to beneficiaries who are minors. If you name a minor as a beneficiary, they will have to settle the matter in probate court. In which an adult will be delegated to manage the money until the minor is old enough to be responsible for it themselves.
If you are married or in a common-law relationship of more than two years, your spouse is automatically your beneficiary.