Basic Life Insurance: Beneficiary

A beneficiary is a person(s) or financial institution (i.e. trust fund) named in an insurance policy as the recipient of the funds in the policy in the event the policyholder dies. You may also want to name a secondary or “contingent” beneficiary, in case you outlive the first beneficiary. Proceeds of a life insurance policy are typically tax-exempt with the exception of any interest earned.

If you do not name a beneficiary or none of your beneficiaries survive you, equal payment is made to the first of the following:

If there is no living beneficiary, the proceeds will be paid to your estate and will have to go through probate proceedings, resulting in a possible delay before your family receives the proceeds. If the proceeds go into the estate, these proceeds may be subject to estate taxes.

When you become eligible for basic life insurance, you should receive a beneficiary form and a copy of the basic life insurance policy from Benefits Administration Services. The beneficiary form lets you name the beneficiary of your basic life insurance policy. Complete the beneficiary form and return it to Standard Insurance Company at the address on the form.

You may change your beneficiary at any time by completing a new Beneficiary Designation Form. The change is not effective until it is recorded by Standard Insurance Company. Once recorded, it will take effect as of the date the form was signed. Note, however, that if a death occurs before the change request was received, payments already made will not be altered.