Your beneficiary is the person you choose to receive your life insurance payout.
During the application process, you will be asked to nominate one or more beneficiaries for the policy. If you choose to nominate more than one beneficiary, you simply need to specify the percentage of the benefit you would like each person to receive. This can always be changed if your circumstances change.
Most people nominate their spouse or their children, but it is completely your choice. If you wish to, you can nominate a corporation, a trust, your grandchildren, your best friend or your favourite charity – it is at your discretion.
If you don’t nominate anybody, the payout will automatically be distributed to your ‘estate’ and as such, will be covered by your Will, if you have one in place. If you don’t have a Will, your ‘estate’ will be subject to State based ‘intestacy’ laws, as described above. This can have significant financial implications for your family.
If you do make a nomination, but the nominated beneficiary dies or the corporation or trust ceases to exist, before a claim is made, and there has been no change in nomination made by you, then any money otherwise payable to that beneficiary will be paid to your ‘estate’.
If you applied for life insurance as a couple, some policies automatically nominate your spouse as the beneficiary. If your policies are ‘linked’ there might not be an option for you to nominate others if you wish.
Over time, your circumstances may change as a result of separation, divorce, or loss of your spouse or partner. Any of these changes may prompt a need to update your beneficiary nominations.
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