Why Reviewing Your Life Insurance Beneficiary Matters

When was the last time you updated your life insurance beneficiary information? If you’re like many employees, you likely selected your beneficiary (or beneficiaries) during orientation or open enrollment and haven’t thought about it since.

Realistically, we may not update this information as often as we should. A reported 90% of life insurance policyholders did not update their life insurance after major life changes, like starting a new business or taking on new debt.¹ As one in two Americans currently have an active life insurance policy,² forgetting to verify your information may cause substantial repercussions for future beneficiaries.

Below are examples of beneficiary challenges you may not have considered.

Risks of Outdated Information

New Employee

Jane Doe fills out her orientation paperwork including her life insurance beneficiaries. Since she’s single and living with her family, Jane puts her parents as the primary and contingent (secondary) beneficiaries.

Five years later, Jane is a tenured employee with a husband and a newborn. Without updating her beneficiaries, her parents will inherit the benefits instead of her husband and baby.

Life Events

Recently divorced, John Smith did not realize that his beneficiaries do not automatically update.

Qualifying life events such as a marriage or divorce can impact how your benefits are dispersed after your death. In this example, without updating any of his information, John’s ex-spouse could receive the benefits rather than any intended family.

Pass It On

As life and priorities change, it’s important to consider your beneficiary selections. In some cases, including an untimely death of your primary beneficiary, your life insurance money could go to the following unless you have a contingent beneficiary:

Your estate
The estate of the deceased beneficiary
Toward existing debt

This could result in your loved ones not receiving any of the money from your policy.

If your backup plan is contingent on your last will and testament, you may want to think again. Typically, beneficiary forms outweigh wills in court. The details of a will may not matter if the beneficiary form is different. Since the beneficiary form is a binding legal document that usually takes precedence over the will, involved parties can take this to probate court.

Without keeping your life insurance beneficiary information updated, you could be putting any descendants or family in a position to contend with a costly, tiring court case.

Few Minutes for Peace of Mind

Grieving and loss can be an uncomfortable subject. One simple thing that could help your family is reviewing and updating a couple of forms. By doing this every year, or at least after major life changes, you’re indicating to whom you want your life insurance benefits to go.

In lieu of a witness signature, a copy of the owner’s (and spouse’s, where applicable) active Government Issued ID can be provided.

If you have an American Fidelity life insurance policy and you need to make a change, you can fill out the Beneficiary Change form. The form requires a witness signature to complete.

This blog is up to date as of June 2025 and has not been updated for changes in the law, administration or current events.