When should you update your life insurance beneficiary?

Your life insurance beneficiary designation determines who receives the death benefit when you die—and it overrides your will. That means even if your will leaves everything to your spouse, an outdated beneficiary form can send the proceeds to an ex-partner or a deceased relative instead. Knowing when to update is essential to making sure the right people are protected.

After a major life event

Most beneficiary mistakes happen because policyholders set a designation once and never revisit it. Any of the following events should trigger an immediate review:

• Marriage: Your new spouse is likely your intended beneficiary, but they are not automatically added to an existing policy.
• Divorce: Many states automatically revoke an ex-spouse's beneficiary rights, but not all do—and employer group policies may not follow state law. Verify and update regardless.
• Birth or adoption of a child: If you want your child to benefit, you must add them. Minor children generally cannot receive proceeds directly, so a trust or custodian arrangement may also be needed.
• Death of a beneficiary: If your primary beneficiary dies before you and there is no contingent beneficiary named, the proceeds may go to your estate and into probate.
• Significant change in a beneficiary's circumstances: A beneficiary who develops a disability may lose government benefits if they receive a lump sum. A special needs trust may be the better solution.

Why your will cannot fix this

Beneficiary designations are a contract between you and the insurance company. They are legally separate from your will and take precedence over it. If your policy still names a former spouse or a parent who has since passed away, the insurer will follow the designation on file—not your estate plan. The only way to correct this is to update the designation directly with the insurer.

Primary versus contingent beneficiaries

Always name both a primary and a contingent beneficiary. The primary beneficiary receives the benefit first. The contingent beneficiary receives it only if the primary cannot—because they have died, disclaimed the benefit, or cannot be located. Skipping the contingent beneficiary leaves a gap that can push proceeds into probate and delay payment to your family for months.

How often should you review your designation?

Even without a major life event, reviewing your beneficiary designations every two to three years is good practice. Relationships change, circumstances evolve, and policies from former employers are easy to forget. Pull every policy you own—individual, group, and any retirement accounts with beneficiary designations—and confirm that each one reflects your current wishes.

What Truscott recommends

An outdated beneficiary designation is one of the most common and costly life insurance mistakes a family can face. A Truscott policy checkup reviews your current designations across all policies, identifies gaps, and helps you make updates before a life event turns into a financial problem for the people you love. Reach out today to make sure your coverage reflects where your life is right now.