How to Decide a Life Insurance Beneficiary As a Veteran

How to Decide a Life Insurance Beneficiary As a Veteran

The beneficiary of your life insurance policy is the person who will receive the proceeds when you die. If you sign up for a life insurance policy, you must select an heir because it is the only legal way to designate who will receive your policy’s proceeds.

Those who are beneficiaries should know how the policy pays out, what their options are, and what might complicate the process.

What is a Life Insurance Beneficiary?

An heir can be either a person or an entity when purchasing a life insurance policy.

There can also be more than one. The beneficiary receives a set amount of money or a series of payments if you pass away during the policy term.

If you own the policy, you have the option of passing the money along as you see fit:

  • The gift can be given to one person.
  • Divide the entire amount between two or more people however you wish.
  • Your estate can be named.
  • The money from the policy can be called to a trust if you have one or if you want one.
  • You can contact any good charity you like when you pass away; some people prefer to leave money for a charity.

You can name minor children if necessary. It helps to be aware that little assets have to be managed by an adult guardian in most states. Having a guardian appointed can be expensive and time-consuming.

How Do Name Insurance Beneficiaries?

There are many cases when it makes sense to name one or more contingent beneficiaries on a policy as well. In the event that the primary beneficiary (or beneficiaries) die or cannot be located, a contingent beneficiary receives some or all of the money.

Primary and Contingent Beneficiaries

Contingent beneficiaries are necessary for many policies. In the case that a primary beneficiary (or beneficiaries) cannot be located, a contingent beneficiary receives some or all of the money.

Take the case of a $1 million policy. The beneficiary is your spouse, and your partner will receive the total amount of the policy if you die during its term.

The primary beneficiary may, however, die before you. Your three adult children are named contingent beneficiaries because you want the money to be passed on to them.

Divide the money equally between them and add them to the policy. By doing this, if your spouse passes away before you do, your children will each receive a third of the funds after you pass away.

Per Stirpes and Per Capita

Beneficiaries should also consider whether to name them per capita or stirpes. When a beneficiary dies, no other contingents are listed on the policy; then the money is distributed according to these.

The most common designation is “per capita”. Therefore, you don’t have to describe each event in detail. All beneficiaries receive the same amount. In the event that one of your adult children dies before you do, the other two will instead receive one-half of the face value.

The per stirpes arrangement, for example, would give your two grandsons the one-third that your adult child would receive if he died before you, and the grandchildren would each receive one-sixth.

Who Can Change the Life Insurance Beneficiary?

The life insurance application process requires you to name at least one beneficiary. However, this does not mean you cannot change it later, and owners can change or add people easily.

Before making any changes to an irrevocable beneficiary, you must get their consent (they must sign the policy change form).

There may be restrictions on who your insurance company or state can be named. If a spouse lives in a community property state, a spouse who lives in a community property state may have to agree.

Importance of your Beneficiary Designation?

Those who have annuities or life insurance policies may be familiar with a beneficiary designation form their policies. Such a designation should have been made when you purchased the policy. A beneficiary designation allows your assets to pass directly to the person or organization of your choice, bypassing the probate process and its costs.

Beneficiary designations can sometimes transfer more value than a will. Changing beneficiary designations is relatively straightforward. Unfortunately, they are often neglected once they are made. After we get married, have a second baby, or lose a parent, human nature takes over, and we don’t update them.

Automatic Termination Of Beneficiary Designation

SGLI members who designate their beneficiary for full-time or part-time coverage will automatically have the designation revoked according to the following rules:

A.   As a consequence of separation or release from all duty or obligation to perform duties in a uniformed service.

B.   In either case, the member must re-enter on duty or assume an obligation to perform duty in another uniformed service.

C.   After being separated or released from all duty in that uniformed service, the member reenlists in that uniformed service more than one calendar day after leaving that uniformed service.


In the event of your death, your VA Life Insurance Beneficiary receives the proceeds of your policy. Maintaining your beneficiary information is very important, and the process of filing a claim and receiving the benefit will be much more straightforward for your family members.

A periodic review of your beneficiary information is recommended to ensure that all information is current. The beneficiary may be the same, and you should review beneficiaries annually to ensure these changes are reflected.

Be sure to review your beneficiary information following certain life events, such as marriage, the birth of a child, or divorce. By doing so, Veterans can spare their family members much pain and suffering in the future.

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