Do I need a will if I have life insurance?

What does life insurance actually do?

Life insurance is a contract between you and an insurance company. If you pass away while the policy is active, the insurer pays a sum of money (the death benefit) to the people you named as beneficiaries.

Your family can use that money for the mortgage, bills, childcare, debts or college. (New to the topic? Start with what term life insurance is.)

But life insurance has a narrow job. It pays money from that one policy to the people on that one form. It doesn't say anything about your house, your car, your savings, your belongings or your kids.

What does a will do?

A will is a legal document that says what should happen to your property and who should handle your affairs after you die. The California Attorney General notes that a will (or a trust) lets you control how your assets are distributed and make arrangements for the care of your minor children.

A will can:

Say who gets your property and belongings
Name an executor to manage your estate
Name a guardian for your minor children
Leave specific items to specific people

If you die without a will, you don't get to choose. Texas Law Help explains that without one, you cannot choose who inherits your money or property. Each state has its own rules for who inherits in that case, and they may not match what you would have wanted.

Life insurance vs. a will: what's the difference?

	Life insurance	Will
What it covers	The death benefit from that policy	Property and belongings in your name that don't pass another way
Who decides who gets it	Your beneficiary form	Your will (or state law if you don't have one)
Goes through probate?	Usually not, if a named beneficiary is living	Usually yes
Names a guardian for kids?	No	Yes
Main job	Replaces income and pays bills	Directs your property and your children's care

How does life insurance skip probate?

Probate is the court process for settling an estate. It can take time and cost money. Life insurance with a named beneficiary usually goes around it. The California Attorney General lists life insurance proceeds among the assets that don't go through probate and instead pass directly.

Your beneficiaries can generally file a claim with the insurer and receive the money without waiting for the estate to be settled. It's one reason life insurance is such a helpful tool for families who need cash quickly. (More on that in how life insurance protects your family.)

Can my will override my life insurance beneficiary?

Generally, no. FINRA notes that beneficiary designations typically override instructions in your will. If your will says "my sister gets my life insurance" but the form names your ex, the insurer will generally pay whoever is on the form.

So the will and the forms need to agree. When you update one, check the other.

What are the most common mistakes people make?

Naming your estate as beneficiary

It can seem tidy to name "my estate" and let the will sort it out. But that pulls the money back into probate. The Insurance Information Institute warns that probate could delay the money and its costs could reduce what your heirs receive.

Skipping the contingent beneficiary

A contingent beneficiary is your backup. The Insurance Information Institute explains that if no primary or contingent beneficiary can be found, the benefit goes to your estate. A backup name keeps the money out of probate and in the hands you choose.

Letting designations get outdated

Life changes faster than paperwork. The NAIC recommends updating policies after major life events like a marriage or a new baby. Divorce matters too. Vague labels like "wife of the insured" can also let an ex-spouse claim the benefit, according to the Insurance Information Institute. Use full names.

Naming young children directly

The NAIC notes that insurance companies generally do not give benefits to minors. If a child is named directly, a court may need to step in. Many parents name a trust instead, which an estate planning attorney can set up. Your will is also where you name the guardian who would raise them. (See life insurance for new parents and life insurance for single parents.)

Forgetting about a blended family

Second marriages, stepchildren and kids from earlier relationships make clear paperwork even more important. Our guide to life insurance for blended families walks through the options.

What should you do next?

Here's a simple checklist to get both pieces working together:

Make a list of every life insurance policy you have, including coverage through work.
Check each beneficiary form. Add full names, percentages and a contingent beneficiary.
Make or update your will, including a guardian if you have children.
Ask an estate planning attorney whether a trust makes sense for your family.
Review everything once a year and after big life events.

If step one shows you don't have enough coverage, or any at all, that's an easy fix. See what coverage could cost you.

How can Evoro Life help?

Evoro Life helps people get term life insurance online and connects them with licensed insurance agents. Policies are applied for through Symetra's SwiftTerm online application and issued by Symetra Life Insurance Company, rated A (Excellent) for financial strength by A.M. Best. You can apply for up to $5 million in coverage, most applicants don't need a medical exam, and the application takes about 18 minutes. Coverage is not available in New York or South Carolina.

Evoro doesn't give legal advice, so talk to an estate planning attorney about your will. If you have questions about coverage or beneficiaries, a licensed agent can help for free at (732) 630-1963. Or check your price now.

Key takeaways

Life insurance and a will do different jobs, and most families benefit from having both.
Life insurance with a named beneficiary usually skips probate and pays directly.
A will covers everything else and is where parents name a guardian for their children.
Beneficiary designations generally override a will, so keep them up to date and consistent.
Avoid naming your estate, always add a contingent beneficiary, and talk to an estate planning attorney.

Frequently asked questions

Does life insurance go through probate?

Usually not, as long as you have a living named beneficiary. The insurer generally pays that person directly. If you name your estate, or no beneficiary is available, the money may go to your estate and through probate, which can delay it.

Can my will change who gets my life insurance?

Generally no. Beneficiary designations typically override instructions in your will. To change who gets your life insurance, update the beneficiary form with your insurer.

What happens if I die without a will but have life insurance?

Your life insurance would generally still go to your named beneficiaries. Everything else you own may be distributed according to your state's law, and a court may decide who raises your minor children.

Should I name my estate as my life insurance beneficiary?

For most people it is not ideal. If the benefit goes to your estate, probate could delay the money and costs could reduce what your family receives. Talk with an estate planning attorney if you think you have a special reason to do it.

How often should I review my beneficiaries and will?

A yearly check is a good habit, plus a review after big life events like marriage, divorce, a new baby or a death in the family. Make sure your will and your beneficiary forms still say the same thing.