Beneficiary designation is the instruction a policyowner gives to a life insurance or annuity company specifying who should receive proceeds at the insuredTMs or ownerTMs death and in what proportions. Designations can name individuals, trusts, charities, or estates as primary and contingent beneficiaries and may use per capita or per stirpes language to handle multi-generational distributions. A clear, up-to-date beneficiary designation takes precedence over wills and generally keeps proceeds out of probate, allowing for faster, more private transfers. Poorly drafted or outdated designations, by contrast, can create disputes, unintended tax results, or payments to ex-spouses, estranged relatives, or the wrong trusts. Thoughtful beneficiary design is therefore a core component of every insurance-based estate and income plan.

Advisors review beneficiary designations during new sales and annual reviews, making sure they reflect current family structures, marriages, divorces, births, deaths, and trust planning. They help clients choose between simple individual designations and more advanced structures that coordinate with revocable or irrevocable trusts. Advisors also clarify how per stirpes and per capita provisions work, how minorsTM interests may be handled, and when beneficiary designations should reference specific trust names and dates. Policy service teams process beneficiary designation forms, verify owner authority, and record changes. Understanding beneficiary designation allows advisors to prevent common mistakes, avoid probate where appropriate, and align insurance proceeds tightly with written estate and financial plans.