InsuranceFinancial Glossary
Beneficiary
Definition
The person or entity designated to receive the proceeds of an insurance policy, will, trust, or retirement account upon the death of the policyholder or account holder. In life insurance, the beneficiary receives the death benefit. In health insurance, the insured person is the beneficiary of the coverage.
Why It Matters
Naming the correct beneficiary and keeping it updated is critical. If your term insurance policy still lists your parents as beneficiaries after you are married with children, the death benefit may not reach your spouse and kids efficiently. Review and update beneficiary designations after every major life event.