Can I Name My Children the Beneficiary on My Life Insurance?

It is generally not advisable to list children as the primary or secondary beneficiary.  One reason is that, because minors cannot directly receive the proceeds of your policy, the state becomes responsible for appointing a legal guardian if you haven’t done so (which takes a lot of time and money), and that guardian will make the call on how the money is spent. Another reason is that, once your children turn 18, they will receive whatever lump sum of benefits were remaining from the death benefit. Most advisers (including Dave), do not recommend providing a child with large sums of money at such an early age. You can avoid this situation by setting up a trust within your will -typically referred to as a testamentary trust – which does not add much cost since the trust is not actually established until your death. This directs the executor of your estate to set up the trust, along with certain limitations on when the monies can be accessed and how they can be used. Get answers to other frequently asked questions.