Beneficiary clause of life insurance
Life insurance always includes a beneficiary clause. With this clause, you can name one or several beneficiaries who receive the benefit in the event of death. The beneficiary clause for life insurance must always be given to the insurance company in writing. You can submit or change your beneficiary clause easily by messaging us through our website or apps at op.fi or OP-mobile.
As the policyholder, you decide the beneficiary even if the insured person is someone other than you. This ensures that the benefit is paid to the person or persons you have selected. If several life insurance policies are valid for an individual insured person, different beneficiaries may be named for each of the policies. In this case, the beneficiary must be named separately for each insurance policy.
Please note that the life insurance benefit is taxable as either income from inheritance or capital income, depending on whether or not the beneficiary is next of kin.
Who can be the beneficiary of life insurance?
Usually, the beneficiaries of life insurance are the people most important in your life, whose future you want to look after. The beneficiary can be, for example:
- next of kin
- spouse, married or in a registered partnership
- child or children
- mother, father or both parents
- separately named beneficiaries, such as common-law spouse
- death estate.
Spouse as the beneficiary of life insurance
Your beneficiary can be your spouse, common-law spouse or registered partner, to whom the insurance benefit is paid in full. If you want your spouse to be the beneficiary, the beneficiary clause should be defined carefully. The generic beneficiary clause “spouse” does not include a common-law spouse, only a spouse with whom you are married or in a registered partnership. If you want the life insurance benefit to be paid to your common-law spouse, you must specifically name them as your beneficiary.
If you wish, you can specify in the insurance’s beneficiary clause that the beneficiary’s spouses have no marital right to the death benefit paid to the beneficiary or to its yield or any property obtained with the insurance benefit. In situations where marital rights may be relevant, such as a divorce, it is the beneficiary’s responsibility to invoke the beneficiary clause. We therefore recommend that the beneficiary hold on to the claim settlement decision in case it is needed as evidence in the future.
If the beneficiaries are next of kin, in other words both the spouse or registered partner and children, the benefit is split with one half paid to the spouse and one half divided between the direct heirs.
Child or children as the beneficiary
If the beneficiaries are your children, that is, your direct heirs, the insurance benefit is divided between them. Officially adopted children are considered equal to next of kin and children. In contrast, foster children must be specified in the beneficiary clause by name as they are not considered children within the meaning of the Insurance Contracts Act. For example, in a stepfamily, it may be necessary to also include your spouse’s children as beneficiaries. In these cases, your spouse’s children must be named separately in the beneficiary clause.
Death estate as the beneficiary
When a death estate is named as the beneficiary, or the beneficiary clause has ceased to be in effect because there are no beneficiaries, the benefit is paid to the insured person’s estate. In this case, the benefit becomes part of the estate’s assets. The benefit is divided from the death estate to legal heirs or beneficiaries under the insured person’s will. Note that the estate’s debts are first deducted from any assets. Any amount remaining after paying debts is split between the heirs or beneficiaries under the will.
Changing your beneficiary
You can change your beneficiary clause at any time while your life insurance policy is valid by notifying us in writing. The easiest way to do this is by logging in at op.fi or OP-mobile and sending us a message. In other words, the policyholder can freely designate or change the beneficiary of life insurance. Depending on the beneficiaries named in the policy, the insurance benefit may be split in various ways.
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