Naming a beneficiary in Burial Insurance: What you need to know

Burial insurance, also known as final expense insurance, is a thoughtful way to ensure your loved ones won’t face financial hardship when it’s time to cover funeral and end-of-life costs. One of the most important decisions you'll make when setting up your policy is naming a beneficiary—the person or entity who will receive the death benefit. In this guide, we’ll walk you through everything you need to know about choosing the right beneficiary, potential pitfalls to avoid, and how to ensure your wishes are honored.

1. What Is a Beneficiary in Burial Insurance?

A beneficiary is the person, people, or organization you designate to receive the insurance
payout when you pass away. This individual will be responsible for using those funds—typically
to pay for your funeral, burial, or cremation services, but they may also use any remaining
balance for related costs like:

  • Medical bills
  • Legal fees
  • Debt payments
  • Memorial services

2. Why Choosing the Right Beneficiary Matters

Your burial insurance is meant to ease emotional and financial stress during a difficult time. Choosing the right beneficiary ensures:

  • Timely access to funds for funeral arrangements
  • Your final wishes are respected
  • No delays or legal disputes over who receives the payout

Selecting a trusted and capable individual (or backup individuals) can prevent confusion and conflict among surviving family members.

3. Who Can You Name as a Beneficiary?

Individuals
  • Spouse
  • Children or grandchildren
  • Sibling or other family member
  • Close friend or caregiver
Legal Entity or Organization
  • A funeral home (assignment of benefits)
  • A charity (if you wish to donate the payout)
  • A trust (if you’ve set one up)

Important: If you name a funeral home directly, make sure they accept assignments of benefits
and the payout amount covers all expected costs.

Multiple Beneficiaries

You can name more than one beneficiary and designate specific percentages for each (e.g., 70% to your spouse, 30% to your son). Always ensure the percentages add up to 100%.

4. Primary vs. Contingent Beneficiaries

It’s smart to name both a primary and a contingent (secondary) beneficiary.

  • Primary Beneficiary: The first in line to receive the death benefit.
  • Contingent Beneficiary: Receives the payout only if the primary beneficiary has passed away or is unable to claim it.

Having a backup prevents delays in disbursing the benefits and avoids having the payout go to
your estate (which can be a longer legal process).

5. Common Mistakes to Avoid

Naming a Minor Without a Guardian

Life insurance companies usually can’t release funds directly to minors. If you want to leave money to a child or grandchild, consider:

  • Naming a trusted adult as the custodian
  • Creating a trust to manage the funds
Not Updating Your Beneficiary After Major Life Events
Divorce, marriage, death of a beneficiary, or family estrangement should prompt a beneficiary review. Failing to update it could mean the wrong person receives the benefit.
Leaving the Beneficiary Field Blank
If no one is listed, or all listed beneficiaries are deceased, the payout could default to your estate—delaying access and possibly involving probate court.
Forgetting to Inform Your Beneficiary
Many people forget to let their chosen beneficiary know they’ve been named. Always inform them and keep a copy of the policy in a safe place they can access.

6. How to Change or Update Your Beneficiary

Most insurance providers make it easy to change your beneficiary. You can typically:

  • Contact your insurer or agent
  • Request a beneficiary change form
  • Fill it out, sign it, and return it for processing

It’s a good idea to review your beneficiary designations annually or any time a significant life change occurs.

7. What Happens If the Beneficiary Is Deceased?

If your primary and contingent beneficiaries are both deceased—or none were named—the death benefit may go to your estate by default. This can result in:

  • Delays: The probate process can take months
  • Extra legal fees: Your heirs may need to hire an attorney
  • Unintended outcomes: Funds may be split in ways you didn’t plan

This is why it’s critical to keep your beneficiary information up to date

8. Can a Funeral Home Be the Beneficiary?

Yes—but it should be done carefully. Instead of naming a funeral home directly, many policyholders use an assignment of benefits, which allows the funeral provider to receive payment directly from the insurer after services are rendered.

This arrangement:

  • Speeds up the process for funeral planning
  • Ensures the insurer pays the funeral home first
  • Allows any excess funds to go to your named beneficiary

Pro Tip: Always verify the funeral home accepts assignments of benefits before naming them.

9. Tips for Making the Best Choice

  • Choose someone you trust to handle financial matters responsibly
  • Discuss your wishes with them in advance so they know what to expect
  • Keep documentation accessible so there’s no confusion or delays
  • Name backups to keep your plan intact even if your primary beneficiary can't accept the payout
  • Consult with an insurance agent or estate planner if you're unsure

10. Final Thoughts

Naming the right beneficiary in your burial insurance policy is just as important as choosing the right coverage. It’s a simple but powerful step that ensures your final wishes are honored, your funeral is paid for, and your loved ones are spared from unnecessary financial stress.
Need Help Choosing the Right Burial Insurance Policy?

At AffordableBurialInsurance.com, we make the process of selecting and setting up your burial insurance smooth and stress-free. Whether you need help naming a beneficiary, comparing plans, or securing affordable coverage, our licensed experts are here to guide you every step of the way.

Contact us today for personalized support and protect your family’s future with confidence and clarity