3 Life Insurance Beneficiary Vs. Your Will

When planning your financial future, knowing the difference between a life insurance beneficiary and a will beneficiary is key. While both options can help you secure assets after death, there are distinct differences in how they work.

Here is a quick guide to understanding the main differences between a life insurance beneficiary and a will beneficiary so that you can make informed decisions about your estate plan.

What is a life insurance beneficiary?

A life insurance beneficiary is someone designated to receive benefits from an individual’s life insurance policy upon their passing away.

It is important to note that any selections for the life insurance beneficiary designation typically override those of a will. This means that the life insurance beneficiary designation is generally considered the more important option when it comes to estate planning.

When setting up a life insurance policy, you must designate whom you would like to receive the benefits upon death. It can be one person, multiple people, or organizations, such as charities or schools. You have the right to change your life insurance beneficiary at any time, so long as you are not incapacitated and can make rational decisions about your estate plan.

Types of life insurance policies

There are two key types of life insurance policies: a permanent life insurance policy and a guaranteed life insurance policy.

Permanent life insurance policies remain in effect throughout an individual’s lifetime and build cash value over time. Guaranteed life insurance policies remain in effect until a certain age, such as 65 or older, and often have lower premiums than permanent life policies.

What is a will beneficiary?

A will beneficiary is someone who has been designated to receive assets from an individual’s estate upon their passing away.

Having a will drafted and regularly updated can help ensure that your wishes regarding the distribution of your assets after death will be respected. You can designate who will receive what assets and when they are to receive them and assign an executor of the estate who is responsible for carrying out the wishes contained in the will.

It is important to note that, unlike a life insurance beneficiary designation, the selections for a will beneficiary are not considered to override those of other estate plans.

Bottom line

When it comes to planning your financial future and ensuring that your final wishes are respected after you pass away, it’s essential to understand the difference between a life insurance beneficiary and a will beneficiary.

A life insurance beneficiary designation typically supersedes those of other estate plans, while a will beneficiary designation does not generally override any other estate plans. Consider both types of designations when planning your long-term financial goals and objectives.

Take the time to review both a life insurance policy and a will when crafting your long-term estate plan, so you can make sure that all your financial goals and objectives are well protected. This way, you’ll confidently know that your beneficiaries will receive the assets they’re entitled to after you pass away. 

Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.  

Life – 68000 Series – In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400. Term/Whole Life – B60000 Series – In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Group Whole Life – Q60000 Series  – In Arkansas, Policy Q60100CAR. In Delaware, Policy Q60200M. In Idaho Policy Q60100CID. In Oklahoma, Policy Q60100COK. In Oregon, Policy Q60100COR. In Texas, Policy Q60100CTX. Group Term Life Q60000 Series  – In Delaware, Policies Q60200C. In Arkansas, Idaho, Oklahoma, Oregon, Texas, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C.

Aflac insurance coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage underwritten by American Family Life Assurance Company of New York.

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