Naming Beneficiaries: Primary, Contingent and Per Stirpes

The beneficiary designation takes up a few lines on a life insurance form, yet it decides who receives the death benefit, in what shares, and what happens if someone you named has died before you. The National Association of Insurance Commissioners (NAIC), the organization of state insurance regulators, describes a beneficiary simply as the person or organization who receives the payout from a life insurance policy.

Getting the designation right takes minutes. Untangling a vague or outdated one after a death can take much longer, and sometimes the money goes somewhere you never intended.

This guide is general information, not legal, tax or insurance advice. Policy forms and state laws differ. Read your own policy, ask your insurer how it handles the situations below, and for complicated families or large amounts, talk with a licensed estate planning attorney. Your state insurance department can answer questions about how insurers must treat you.

Primary and contingent beneficiaries

Your primary beneficiary is first in line. You can name one person or several, and you can name an organization. The Texas Department of Insurance (in consumer tips updated December 2025) notes that you can name a spouse, children, other relatives, friends, or an institution such as a business or charity, and that you can choose more than one beneficiary and say how the money will be divided.

A contingent beneficiary, sometimes called a secondary beneficiary, is the backup. Contingent beneficiaries receive money only if no primary beneficiary is alive to collect it. The federal Servicemembers' Group Life Insurance (SGLI) beneficiary form, SGLV 8286 (February 2025 edition), spells this out in plain terms: if you have no surviving primary beneficiaries, the benefit goes to your secondary beneficiaries, if any.

When you name more than one person, say exactly how to split the money. The same SGLI form, for example, requires that the shares add up to 100 percent or to the full dollar amount of the insurance. Your insurer's form may use percentages, fractions or dollar amounts; whichever it uses, make the math add up.

What happens if a beneficiary dies before you

This is where many designations fall short. Suppose you named two people as primary beneficiaries and one of them dies before you. Unless your designation says otherwise, the policy's own rules decide what happens to that person's share.

The SGLI form shows one common approach: if you name more than one primary beneficiary and one of them dies before you, the shares are paid equally among the remaining primary beneficiaries. Under that kind of rule, the deceased beneficiary's children receive nothing from your policy.

The other approach passes a share down a family branch instead. The SGLI form's default payment order works this way for children: the share of a child who has died is divided equally among that child's descendants. Beneficiary forms sometimes use the Latin legal term per stirpes for this kind of arrangement, but how that wording works depends on your policy and your state's law, so don't rely on a general definition.

For example, imagine a hypothetical parent who names two adult children as primary beneficiaries, 50 percent each. One child dies first, leaving two children of her own. If the remaining-beneficiaries rule applies, the surviving child receives 100 percent. If the parent's designation instead passes a deceased child's share to that child's descendants, and the insurer accepts that wording, the deceased child's 50 percent would be split between her two children.

Insurers do not all accept the same wording. Before you write per stirpes or any similar phrase on a form, ask the insurer whether it accepts that wording and exactly how it would pay out, get the answer in writing if you can, and consider asking a licensed estate planning attorney how it fits with the rest of your plan.

If no named beneficiary is alive

If every beneficiary you named has died, or you never named one, the policy decides where the money goes. The Texas Department of Insurance guide says that in that case the company will pay the death benefit to your estate, and that your heirs might have to pay taxes on money they receive from your estate. Money paid to an estate may also have to go through the estate settlement process before it reaches anyone.

Some government programs set an order by law. For SGLI, the SGLV 8286 form lists the order as: a widow or widower; then children in equal shares, with a deceased child's share going to that child's descendants; then parents; then the executor or administrator of the estate; then other next of kin. Private policies follow their own contract terms, which may be quite different, so do not assume a default will match your wishes.

Revocable and irrevocable designations

If your designation is revocable, you can change it by filing a new form with the insurer. An irrevocable designation is different. The NAIC glossary defines an irrevocable beneficiary as one who has a vested interest in the policy proceeds even during the insured's lifetime, because the policy owner can change the designation only with that beneficiary's consent. If you are asked to make one, understand that you are giving up control, and consider getting legal advice first.

Keep your designations current

A beneficiary designation is not updated by anything else you do. The SGLI form puts it directly: beneficiaries are not automatically changed by life events such as marriage, divorce or the birth of children. Updating your will does not necessarily change your policy either. As the New York Department of Financial Services puts it, policy proceeds are payable to the beneficiary of record.

State laws can step in for some events, but they vary. Washington's Office of the Insurance Commissioner, for instance, says that after a divorce or the end of a domestic partnership in Washington, your former spouse or partner cannot be your beneficiary unless a court orders it or you fill out a new form naming them. Other states have their own rules, so the safest approach is to file a new designation yourself.

The NAIC recommends that policyholders:

• Update beneficiaries after a major life event, such as the birth of a child or a marriage.
• Check policies once a year to confirm that all beneficiaries are included and their contact information is correct.
• Include the Social Security or tax ID numbers of all beneficiaries.
• Tell beneficiaries about the policies, or tell a trusted advisor such as an accountant or attorney.
• Keep a current copy of the policy with your will or other estate papers where your family can find it.

Remember that each policy has its own designation, including any group coverage you have through work. Check every one.

Special situations

Young children need extra planning, because the NAIC notes that insurance companies generally do not give benefits to minors. Our guide "Leaving Life Insurance to Children: Guardians, UTMA and Trusts" covers the options.

If you want the money to go into a trust, the trust has to exist. The SGLI form warns that naming a trust as a beneficiary on the form does not create a trust; you need trust documents, usually prepared with an attorney.

If you want to leave money to a charity, use its full legal name and, if the form asks, its tax ID number, so the insurer can identify it without guesswork.

Key takeaways

• Name at least one primary and one contingent beneficiary, and make the shares add up.
• Decide what should happen if a beneficiary dies before you, and ask your insurer how it handles per stirpes wording.
• If no beneficiary is alive, many policies pay your estate, which can mean delay and possible taxes for heirs.
• Life events, wills and divorces do not reliably update a designation; file a new form yourself.
• Review every policy, including group coverage at work, at least once a year.

Sources

• National Association of Insurance Commissioners, What Should I Know About Life Insurance Beneficiaries? (October 12, 2026)
• National Association of Insurance Commissioners, Glossary of Insurance Terms
• Texas Department of Insurance, Life insurance guide (updated December 12, 2025)
• Texas Department of Insurance, Do you need life insurance? (updated December 12, 2025)
• U.S. Department of Veterans Affairs, SGLI Beneficiary Designation, Form SGLV 8286 (Ed. 02/2025)
• New York Department of Financial Services, Lost Policy Finder
• Washington Office of the Insurance Commissioner, Learn how life insurance works