Beneficiary
The person or entity designated to receive an insurance payout.
Last reviewed July 28, 2026
Reviewed for accuracy and clarity by Sandeep Singh before publication. Learn about our editorial process.
What it means
A beneficiary is the person, people, or entity (like an estate or trust) you designate to receive the payout from a life insurance policy when a claim is made. You can typically name more than one and specify how the payout should be split.
Why it matters
An outdated beneficiary designation is one of the most common — and easily avoidable — mistakes in personal finance, especially after a major life change.
Common misunderstandings
- A will doesn't override a beneficiary designation — insurance payouts generally go directly to the named beneficiary, regardless of what a will says.
- Designations don't update automatically after events like divorce or remarriage — they need to be actively changed.
Where you'll see it
On every life insurance application, and worth revisiting after any major life change.
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