No, a last will and testament does not override the beneficiary designation on a life insurance policy.
Your testamentary will is used for directing assets of your estate that do not have joint ownership (such as real estate, or a bank account). Your life insurance or annuity policy that has a legally designated beneficiary cannot be overridden or voided by your last will and testament.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Does a will supercede a life insurance beneficiary? No as they are two "separate" legal documents that both carry out as instructed by the insured upon death. Unless the insurance policy's beneficiary designation refers to the will or estate, the insurance policy will act independently of the will and probate.
Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
There may be specific state exceptions, but in general terms the beneficiaries of a life insurance policy named by the policy owner receive the death benefit proceeds.Sometimes it is difficult for a person with the power of attorney to act on behalf of the policy owner to effect a change in beneficiaries.
Sr. Advanced Markets Consultant, Ash Brokerage, Greater NYC Area
To expand a bit ...
Life insurance proceeds are among a class of assets that "pass by contract" at death; in this case, the contract is the insurance policy with its beneficiary designation. (Other assets that pass by contract include IRAs / Qualified Retirement Plans, annuities, jointly-owned bank or investment accounts, etc.) Assets that don't pass to a beneficiary by operation of a contract are subject to probate, which is where a will comes in.
It is possible to have the proceeds of a life insurance policy be distributed according to the terms of a will by naming the insured's estate as the policy beneficiary (e.g. Beneficiary: Estate of the Insured). However, doing so is generally avoided because of the disadvantages inherent in the probate process:
During probate, a will is subject to being challenged by anyone with standing (generally, anyone who can prove a relationship to the deceased). A beneficiary designation isn't subject to those types of challenges.
Assets of the probate estate are subject to the claims of creditors of the estate; life insurance proceeds paid to the insured's estate may get depleted to repay debts before the intended heirs receive any benefit.
The probate process is a public court proceeding, and can be lengthy. A life insurance death benefit claim involves only the beneficiary and the insurance company, and claims are generally paid very quickly - often within two weeks.
In almost no cases does a will supercede the contractual designation of the beneficiary of a life insurance policy. However, you often hear about people updating their wills, while it is not so common to think about updating their life insurance policies. Don't accidentally leave your policy to an ex-husband rather than a current one, to your parents rather than your own children, etc, by forgetting to change the beneficiaries on your life insurance policy. Your will cannot undo the mess that would be created by leaving a big part of your estate to the wrong person.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
No, it doesn’t. Any knowledgeable life insurance salesperson will tell you this.
But if you want an answer you can bank on legally, you need to ask an estate attorney.
Also bear in mind this: if the beneficiary is deceased, things can get very sticky. If you still want the life insurance benefit to go to a specific person, as opposed to ending up in your estate, then you need to take a few extra measures to accomplish this. Naming a contingent beneficiary is one way.
And if the beneficiaries are minors, you need to make provisions that your executor and custodian will take care of them. Spell this all out so you can still retain control over how the benefit is past. Get a good attorney with specialized knowledge in this area to help you.
.JPG){kind=avatar}
Your testamentary will is used for directing assets of your estate that do not have joint ownership (such as real estate, or a bank account). Your life insurance or annuity policy that has a legally designated beneficiary cannot be overridden or voided by your last will and testament.
Life insurance proceeds are among a class of assets that "pass by contract" at death; in this case, the contract is the insurance policy with its beneficiary designation. (Other assets that pass by contract include IRAs / Qualified Retirement Plans, annuities, jointly-owned bank or investment accounts, etc.) Assets that don't pass to a beneficiary by operation of a contract are subject to probate, which is where a will comes in.
It is possible to have the proceeds of a life insurance policy be distributed according to the terms of a will by naming the insured's estate as the policy beneficiary (e.g. Beneficiary: Estate of the Insured). However, doing so is generally avoided because of the disadvantages inherent in the probate process:
During probate, a will is subject to being challenged by anyone with standing (generally, anyone who can prove a relationship to the deceased). A beneficiary designation isn't subject to those types of challenges.
Assets of the probate estate are subject to the claims of creditors of the estate; life insurance proceeds paid to the insured's estate may get depleted to repay debts before the intended heirs receive any benefit.
The probate process is a public court proceeding, and can be lengthy. A life insurance death benefit claim involves only the beneficiary and the insurance company, and claims are generally paid very quickly - often within two weeks.
But if you want an answer you can bank on legally, you need to ask an estate attorney.
Also bear in mind this: if the beneficiary is deceased, things can get very sticky. If you still want the life insurance benefit to go to a specific person, as opposed to ending up in your estate, then you need to take a few extra measures to accomplish this. Naming a contingent beneficiary is one way.
And if the beneficiaries are minors, you need to make provisions that your executor and custodian will take care of them. Spell this all out so you can still retain control over how the benefit is past. Get a good attorney with specialized knowledge in this area to help you.