The party to whom an insurance benefit is paid. In an insurance policy’s beneficiary clause, the policyholder defines who the policy’s beneficiaries are. Examples of beneficiaries: next of kin, children or a named person. When the insurance policy ends, benefit is paid as specified in the valid beneficiary clause – even if the policyholder had a valid will or prenuptial agreement. If the beneficiary is a death estate, the benefit becomes part of the estate’s assets. The benefit amount is then divided between legal heirs or beneficiaries under the insured person’s will.
In endowment insurance, the policyholder defines the beneficiaries separately for the death benefit and for the insurance assets (endowment lump sum). The insurance assets beneficiary will receive the lump sum on the agreed date when the policy matures. By contrast, the death benefit will be paid to its beneficiary in the event of the insured person’s death.
If you are the policyholder, please remember to keep the beneficiary clause updated. You can change your beneficiary clause anytime by informing your insurance company about it in writing.
Read more about life insurance beneficiaries
Read more about taxation of life insurance
Read more about taxation of endowment insurance
Read more about investing or saving through insurance