Your Spouse Doesn’t Need to be the Only Beneficiary on your Life Insurance Policy


Many people believe that you must name your spouse as the beneficiary on any life insurance policies that you have. While naming your spouse may be your primary objective, that assumption is not even remotely true.

You can name anyone as a beneficiary who has an insurable interest, which is an insurance term that means a person who will suffer a financial loss upon the insured’s death. That can be your spouse, but it can also be a number of other people.

Your children

In addition to your spouse, you can name your children as direct beneficiaries of your life insurance policies. In fact this may even be desirable. If you have multiple life insurance policies, you can have your spouse as beneficiary on one, as well as separate policies naming your children as beneficiaries on the others.

You can have your largest policy go to your spouse, to handle support of the family after your death. But you could also have smaller policies going your children, that way you’ll be making a provision for them for adulthood, even though you’re no longer around to do it.

Your parents

You can name your parents as beneficiaries, even if they are not dependent upon your income for survival. Since they are blood relatives, they automatically are considered have an insurable interest.

And beyond immediate financial needs, you may want to name your parents as beneficiaries in your life insurance policy so that there is a provision in the event of your death, should they reach a point in life where they will need financial assistance. A life insurance policy can help them financially, even though you are not there to do it yourself.

A business partner

It is common in small business to name a business partner has a beneficiary of a life insurance policy. The partner has an insurable interest by virtue of the fact that they are actually dependent upon your contribution to the business in order for it to succeed. Your death would cause a financial hardship to your business partner.

A life insurance policy means that your partner (you can also name multiple partners), can use the proceeds to buy out your share of the business from your family. In that way, you’ll be turning ownership of the business completely over to your partner, while the money itself is used by your family for additional support.

An ex-spouse

Divorce decrees commonly require that a person maintain a life insurance policy for the benefit of an ex-spouse. While this is easily understood if there are dependent children from that marriage, it can also be necessary in the event there is a court-ordered alimony.

If your ex-spouse is in any way dependent upon your income, you can name that person as a beneficiary on any life insurance policies that you have.

You can also name a charity of your choice

The one exception to the insurable interest provision is charities. You can name any charity of your choice as a beneficiary in a life insurance policy. You don’t even have to have any kind of financial involvement with that charity. The naming of the charity as beneficiary simply indicates that it represents a cause that you consider sufficiently important that you want to fund it upon your death.

As you can see, you can name many different people – and even organizations – as beneficiaries in your life insurance policies. You are never limited simply to name your spouse, even though it is highly desirable that you do. Life insurance is your option to take care of several financial concerns at once, that may arise as a result of your death.