What is the point of life insurance? To ensure the financial security of your loved ones if you die. Choose the person or people who get the life insurance proceeds, but if you don't keep it up to date, the results can be catastrophic for your family's money.If you don't know what a health insurance beneficiary is life or want to find out how to avoid a critical mistake, make sure you understand these vital facts about life insurance beneficiaries. What is a Life Insurance Beneficiary? In life insurance, the beneficiary term of life insurance is the person who receives a death benefit if the insured person dies during the term covered. In other words, if the person with a life insurance dies, the beneficiary gets the money from a life insurance policy. The whole purpose of life insurance is to give someone money if you die, so it's important to choose who will get that money, and keep that person up to date. Whether you get life insurance through work or a policy that you bought yourself, the beneficiaries work the same way. Typically you can add one or more life insurance beneficiaries. If you put more people, you can divide the proceeds evenly or give a specific percentage to each. It is also possible to designate a potential beneficiary. This is an elegant way to tell the reserve beneficiary if the chosen beneficiary has also died. If you don't choose a beneficiary, the policy generally pays to your property. This puts money for creditors and lenders who will try to get money for unpaid debts instead of writing a check directly to your loved ones. Life Insurance Beneficiaries Are Definitive If you get divorced, something very common in the United States today, I probably don't want your ex-wife or ex-husband to get paid for your life insurance if something happens to you. However, that same scenario happens quite frequently: a will or trust controls what happens to your assets such as bank accounts, investments, real estate and assets if you die. However, life insurance is outside of a will or trust. You must update the beneficiaries of life insurance even if you update your will. Life insurance beneficiaries are final. Nothing replaces your choices here, so be sure to update your beneficiaries if you have a big life change or a change in preferences. It's easy to designate or update beneficiaries. My first life insurance was born out of work in my early 20s. I was not married and had no children, but life insurance was a benefit fully paid by my employer. You can't beat free! I chose my sister as life insurance recipient at the time. When I got married, I filled out a form on my company's intranet to update the payee from my sister to my wife. It took less than five minutes. All I needed was his name, contact information and optionally his social security number for verification. For your life insurance outside of work, contact the insurance company for information on how to make updates. Usually it requires a quick form, which in some cases can be completed online. If you have children or other preferences as to where life insurance money goes, be sure to include it. Take a few minutes to update or review your choices in case of doubts or questions. Beneficiaries are the most important part of life insurance Life insurance is meant to protect someone else. You won't be around to enjoy the proceeds of your life insurance if it ever pays. To make sure the monthly rewards offer the benefits you expect to your loved ones, make sure the beneficiaries of your life are up to date. It's simple and only takes a few minutes to make sure your loved ones are protected.