Co-Founder, Coastal Financial Partners Group, California
As long as a beneficiary is designated, no. If there is no beneficiary, the proceeds default to the estate which means probate. Having a named beneficiary rather than the estate of the insured allows the property to pass by contract directly to heirs without the need for probate. Its effect generally supersedes anything that a will or trust might say.
It is also a good idea to consider naming at least one contingent (backup) beneficiary and have the insurer confirm the identity of all beneficiaries at least every three years. Clients are often surprised to find they have existing policies with beneficiaries who are deceased which means the estate would get the proceeds and be subjected to probate.
You may elect to name a trust as beneficiary to achieve some planning goals for the ultimate beneficiary, such as 'spendthrift' protection. In such a case, you have made a deliberate decision to use the probate system. You are well advised to give serious consideration to this idea if you have younger beneficiaries.
Life insurance death benefit proceeds go direct to the policy beneficiaries. The beneficiary declaration in the application is the directive to the life insurance company on death benefit distributions. There is also an option for contingent beneficiary as well. Avoiding probate is another feature of life insurance coverage.
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It is also a good idea to consider naming at least one contingent (backup) beneficiary and have the insurer confirm the identity of all beneficiaries at least every three years. Clients are often surprised to find they have existing policies with beneficiaries who are deceased which means the estate would get the proceeds and be subjected to probate.