Should You Include Your Life Insurance Policy In Your Will?

Life insurance provides your beneficiaries with financial assistance. In addition to purchasing adequate life insurance coverage, understand if you should list it on your will.

Probate Versus Nonprobate Assets

When you die, your estate goes into probate. Probate is the process through which the executor of your estate files paperwork with the probate court to prove the validity of your will and ensure your final wishes are carried out.

Typically, any outstanding debts are paid. Then money is allocated to survivors. Of course, the executor also ensures that individuals receive any specific assets you want them to have such as real estate, art or heirlooms.

Some of your assets will not go into probate after your death, however. Life insurance is one nonprobate asset. The beneficiaries listed on the policy receive the death benefit whether the policy is listed in the will or not. This occurs because probate courts view life insurance as a contract between you and the life insurance company. You pay premiums, and the life insurance company agrees to give your policy’s beneficiaries the death benefit for which you paid.

Why List a Life Insurance Policy in Your Will


Even though your life insurance policy is a nonprobate asset, you may consider listing in in your will. Listing your life insurance policy makes it easier for your beneficiaries to  discover the policy, tell the company that you have died and receive the financial support they need.

You will also want to include your life insurance policy in your will if your estate is the beneficiary. In this case, the policy’s death benefit will to into probate and be distributed according to your wishes.

How to Choose Life Insurance Beneficiaries

You may choose whomever you wish to be your life insurance beneficiary. The policy’s beneficiary can be the same person you list in your will or someone totally different.

Popular beneficiaries include:

  • Spouse

  • Children

  • Parents

  • Charity or foundation

  • Estate

You can change your life insurance beneficiary at any time. Simply contact your life insurance company and complete the beneficiary form. Remember that because your policy is a legal contract, you cannot use your will to change the beneficiaries on your life insurance policy. Be sure to update your beneficiaries as needed to ensure your final wishes are carried out.

Life insurance is a valuable estate management tool. It can provide financially for your family or fund a charity after you die. Decide today if you will list it in your will or not, and be sure to update the beneficiaries.
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