I have life insurance through my job. Initially, I designated my parents as primary beneficiaries, each receiving 50%, with my best friend as the secondary beneficiary, receiving 100%. However, I would actually prefer my best friend to be the primary beneficiary because she would benefit more. As an only child, she is the closest person I have to a sister, and we have had a family-like relationship spanning over 20 years between our families.
From what I’ve read, a beneficiary must have an ‘insurable interest’ in me, meaning my death would negatively impact them financially. While my best friend doesn’t meet this criteria in a traditional sense (I’ve only lent her money on a couple of occasions, which is not significant), can she still be a beneficiary, and could she potentially be the primary beneficiary?
dont think there’s anything to worry about, you can name anyone as a life insurance beneficiary.
I think some states such as California have restrictions. To be on the safe side, it is important to consult with your insurance policy provider
Beneficiary designations for life insurance obtained through your job might have different rules compared to individually owned policies. Here’s what you need to consider:
Employer-Sponsored Life Insurance: Many employer-sponsored life insurance plans don’t require beneficiaries to have an “insurable interest.” This means your best friend can still be a beneficiary, even if she wouldn’t face financial hardship due to your death.
Check Your Plan Documents: The specific rules regarding beneficiary designation will be outlined in your employer-sponsored life insurance plan documents. Carefully review these documents or contact your Human Resources department for clarification.
How to Proceed:
Review Your Plan Documents: Start by obtaining your employer-sponsored life insurance plan documents. Look for sections on beneficiary designation and any requirements for beneficiaries.
Contact Your HR Department: If the documents aren’t clear, or you have any questions, reach out to your company’s Human Resources department. They can explain the specific rules and how to update your beneficiary designations.
In most cases, if your employer-sponsored life insurance allows you to name anyone as a beneficiary, you should be able to designate your best friend as the primary beneficiary.