Difference between Life Insurance Beneficiary Vs Will

What Is a Life Insurance Beneficiary?

What Is a Will Beneficiary?

What Is the Difference Between Life Insurance Beneficiary and Will Beneficiary?

We have summarised life insurance beneficiary vs will for our readers in this table below:

Point of Difference

Life Insurance Beneficiary

Will Beneficiary


Beneficiaries receive death benefits from the insurance company after the demise of the policyholder.

Beneficiaries receive estate portions of the owner as per the particulars mentioned in the will.


Policyholders have the power to assure coverage for their loved ones in the form of annuity or lump sum payment. Beneficiaries can use this money to clear off existing liabilities and lead their lifestyle without any problem for a few years.

Wills allow selecting the deserving heirs and ensuring your possessions are not passed to unintended beneficiaries.

Processing Time

Death benefits get accredited to all beneficiaries almost immediately after the policyholder’s unfortunate demise.

Beneficiaries receive the assets at a predetermined time as set by the will issuer.

Can a Will Affect Claims of a Life Insurance Beneficiary?

Do I Need a Will Even After Issuing a Life Insurance?

FAQs About Life Insurance Beneficiary Vs Will

Can I use my will to distribute a life insurance death benefit?

Including a life insurance policy within a will’s framework is not recommended, as the asset allocation can be done separately in the former case. Furthermore, life insurance allows you to select beneficiaries of the death benefits, i.e., they receive assets which were never even owned by the policyholder, which is you in this case. Therefore, issuing a separate will ensures your preferred people will enjoy your legacy and the amount entitled to them as death benefits.

Is life insurance part of my estate?

Estate signifies everything a person possesses during his lifetime, whereas life insurance guarantees a lump sum amount as compensation to the policyholder's family. Thus life insurance plans are not part of the estate as they involve registered claimants and not beneficiaries decided per the estate owner's ordinance.

Can a will supersede a life insurance beneficiary?

The beneficiaries named on a life insurance policy take precedence over a will. Most of the time, regardless of the directions in the will, the beneficiary named on the life insurance policy has the right to claim the benefit.

Why should you not name your children as direct beneficiaries on life insurance policies?

Financial advisors recommend setting an adult as a direct beneficiary for life insurance as they can decide how to use the sum wisely. On the other hand, chances are high that if you designate your child as the primary beneficiary, they will not use the money properly for their education or may develop foolish spending habits, ultimately leading to bankruptcy.