1800-270-7000

Aditya Birla Sun Life Insurance Company Limited

The Difference Between A Will And Life Insurance Beneficiary

30 April 2025

5 mins

★

Rated by reader

https://lifeinsurance.adityabirlacapital.comnull

Get immediate income payout after 1 day of policy issuance^

I agree to the Terms of Usage and Privacy Policy and by submitting my contact details here, I override my NDNC registration and authorize ABSLI and its authorized representatives to contact me by phone/e-mail/SMS/WhatsApp for further assistance and information about this proposal and resulting insurance policy.
Disclaimer : ABSLI Nishchit Aayush Plan (UIN No 109N137V12) is a non-linked non-participating individual savings life insurance plan.
^ Provided 0 year deferment & Annually in Advance payout frequency is chosen at the time of inception of the policy. Annually in Advance payout frequency is only available in "Annual" premium payment mode. ADV/2/24-25/2901

Table of Contents

Think of a movie—the final scene—where your life is the story and family and friends are the stars. The spotlight is on your legacy, built from years of work, savings, and planning. As the credits start to roll, one of the biggest decisions a person has to make is who gets the assets that have been so carefully built up over the years. These are not the only monetary assets, but they represent the security, stability, and love you would want to leave behind. The two lead players in this final act? Your Will and your Life Insurance policy. Each will contribute to shaping the future of the one you love. But, just like in every good play, each actor has a different script, is bound by different sets of rules, and furthers the story differently.

Knowing how a Will and Life Insurance policy beneficiary differs in purpose and function is like knowing the role that each of the characters plays in your movie. Both are very important and serve their objective in a manner quite different from the other. As a director, it's important to learn how these two financial tools might work with each other to bring about a seamless and meaningful legacy.

This article is going to attempt to demystify these differences so that by the end, you will have a clearer understanding.

What Is A Life Insurance Beneficiary?

A Life Insurance beneficiary or a nominee of a policy is a person the policyholder names to receive the death benefit from a Life Insurance policy when the insured dies. Think of this: a financial safety net—a predetermined sum that would directly go to your beneficiaries of choice upon your passing. This can provide an immediate death benefit, as it avoids probate, a time-consuming and cumbersome legal procedure that frequently delays the distribution of assets. The beneficiary you name, be it a relative, friend, or favourite charity, could benefit from your Life Insurance policy.

One of the strong points regarding Life Insurance policies is how relatively simple they are: You decide who gets the money and how much. As a matter of fact, you can name multiple beneficiaries and even dictate how the benefit will be divided between them—further customisation of your financial legacy based on the needs of your loved ones.

What Is A Will Beneficiary?

A Will beneficiary is the person who will receive the deceased's properties or assets. These can be money, real estate, personal effects, or other assets and are subject to probate. The Will shows how the estate is to be divided among these beneficiaries after the debts owed and relevant taxes are paid.

Still in a dilemma about Will vs Life Insurance beneficiary? We are here to help you!

Will Beneficiary Vs Life Insurance Beneficiary

Let’s tabulate to have a better understanding of Will and Life Insurance beneficiaries:

Feature	Life Insurance Beneficiary	Will Beneficiary
Definition	A person who is assigned to receive the death benefit from a Life Insurance policy.	A person named in a Will to receive assets from the estate.
Probate	The proceeds do not go through probate, hence faster distribution.	Assets are subject to the probate process, which may take a long time and require litigation.
Aim	Helps with financial assistance to the beneficiaries in case of the insured's death.	Disburses the individual's assets as per their preferences.
Duration	Payments are normally paid out relatively quickly after the claim has been approved.	Takes months or even years due to probate and legal proceedings.
Dispersion Process	Direct payment from the insurance company to the beneficiary.	Distribution is done through an executor who oversees the probate process and ensures the estate is being settled in accordance with the Will.

While both types of beneficiaries are likely to inherit property from a deceased person, a Life Insurance beneficiary receives a death benefit issued out of a Life Insurance policy, and a beneficiary from the Will obtains property as stated by the Will. It should be noted that the proceeds from Life Insurance seldom go through probate, so beneficiaries can get the money faster. Wills and Life Insurance can be used together to make sure the deceased loved ones are well taken care of financially in case of their absence. Both play a vital role within an estate plan but work independently of one another.

Can A Will Change A Life Insurance Beneficiary?

No, a Will cannot change a beneficiary of Life Insurance. The Life Insurance policy itself is a legal agreement between the policyholder and the insurance company, separate from the Will. The beneficiary named in the said policy is legally entitled to the death benefit irrespective of what the Will might state. Whoever wishes to change the beneficiary on their Life Insurance must contact the insurance company, which then uses its own processes.

The Life Insurance beneficiary would be determined by designations made individually under the insurance policy, which would prevail even if different distribution instructions were mentioned in the Will with respect to other assets.

Under some exceptional circumstances, a Will might help pay the death benefit. Say no beneficiary is named, or the beneficiary died before the payment of the death benefit or on the same date as the insured, then the payment of the death benefit will be made based on the decedent's Will if a contingent (secondary) beneficiary was not assigned.

Winding It Up!

Understanding the differences between a Will and Life Insurance beneficiary comes quite handy in helping you make the right decisions regarding your estate. While both have different purposes, they support each other in a way that puts your family in good financial shape when you die. You can designate beneficiaries for both, which gives your family immediate financial relief and asset distribution over time after death, fitting certain particular circumstances. Keep your Will and Life Insurance policy updated; seek the help of lawyers and financial experts to make sure your wishes are carried out as you would like.

Sources

[1] https://irdai.gov.in/web/guest/document-detail?documentId=5625747

How Much Helpful You Found This Article?

Rated by 0 reader

Don’t forgot to share helpful information in your circle

FAQs

Can the Will and the Life Insurance have the same beneficiary?

Yes, the same people who are named as beneficiaries in a Will could benefit from the policy. However, the Will and Life Insurance policies exist independently of one another. The Will applies only to the distribution of property that forms part of the estate. At the same time, the beneficiary designation in the Life Insurance policy dictates who receives the policy's death benefit, irrespective of what the Will may say. The same names could appear in the Will and the policy, but they do not necessarily need to.

Do I need a Will if I have a Life Insurance?

Of course, you do need a Will if you have Life Insurance. Life Insurance provides for your loved ones when you are no longer around, giving them protection through financial means. On the other hand, a Will decides how your property should be distributed. While Life Insurance makes sure that an amount is given to your beneficiaries, a Will allows wider control over your estate and makes sure that your wishes are followed through. Second, the Will is also a powerful tool that can protect your family's interests in case something happens to the person you named as the beneficiary.

Can I easily change beneficiaries in both documents?

Both provide for changes in beneficiaries but with different procedures. Changing the beneficiary of a Life Insurance policy involves contacting the insurance company and requesting changes. Changes in beneficiaries of a Will require writing a new Will or an amendment to it, and execution may require some legal support and following certain formalities in law, which is relatively complicated.

When do assets from a Will and Life Insurance become available to beneficiaries?

The assets through a Will are provided to the beneficiaries after going through the troublesome probate process, which takes many months or even years, depending on how complicated an estate is. In contrast, Life Insurance proceeds are normally paid out to the beneficiaries within a short period after filing and approval of a claim. IRDAI, the insurance regulatory body in India, stipulates a time period within which death claims have to be settled. Recently, it revised the timeline for the settlement of death claims. Insurance companies are now compelled to issue claims within 15 days from receipt if no investigation is required and within 45 days from receipt if an investigation is required^[1]. The payment of the death benefit can, however, be delayed in the event of disputes or any complications.

Show All

Hide