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Beneficiaries on Life Policies

This article is made available with the kind permission of Van der Spuy and Partners.

Jeremy is recently divorced and has just started dating again. This got him thinking about his future and the care of his minor daughter, Hannah, who is under the age of 18 years. Jeremy is reminded that his ex-wife is still the beneficiary of his life insurance policy and makes a mental note to contact his insurance broker to revoke his ex-wife and nominate Hannah as his beneficiary in the event of his death to ensure that the proceeds of his policy are paid out to Hannah.

But what will happen if Jeremy passes away before he has the opportunity to change the beneficiary on his life insurance policy? Will the proceeds of Jeremy’s policy be paid to his ex-wife and will his minor daughter, Hannah, be left without any rights to the proceeds of this policy? The reality is that circumstances like these often occur in practice and in many cases result in unforeseen and even unfortunate consequences. In this case, the proceeds of Jeremy’s policy would have been paid to his ex-wife and not to Hannah.

But let’s say Jeremy did get the chance to revoke his ex-wife and nominate his daughter as beneficiary on his insurance policy so that she would receive the benefit upon his death. The question now is, as a minor, would she be entitled to receive the proceeds?

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