Life Insurance Beneficiaries

A plain-language guide for Canadians

What is a beneficiary?

A beneficiary is the person or entity you name to receive the life insurance death benefit if you pass away while the policy is in force. You choose your beneficiary when you apply for coverage, and you can usually update the designation later.

Most life insurance in Canada is paid directly to the named beneficiary — bypassing your estate, avoiding probate, and typically arriving faster than assets that go through a will.

Types of beneficiaries

• Primary beneficiary: The first person or organization to receive the benefit.
• Contingent (secondary) beneficiary: Receives the benefit if the primary beneficiary predeceases you or cannot be located.
• Revocable beneficiary: You can change the designation at any time without the beneficiary's consent.
• Irrevocable beneficiary: You cannot change the designation, borrow against the policy, or surrender it without the beneficiary's written consent. Used in some divorce agreements and corporate arrangements.

Who can be a beneficiary?

In Canada, you can name almost anyone:

• A spouse, partner, or common-law partner
• A child or grandchild (a trustee is typically required for minors)
• A parent, sibling, or other family member
• A friend
• A charity or non-profit
• A corporation or trust
• Your estate (the insurance proceeds then flow through your will)

What happens if you don't name a beneficiary?

If you name no beneficiary, or all named beneficiaries have predeceased you, the death benefit typically goes to your estate. This means it becomes subject to probate — a legal process that can take months, attract fees, and delay payment to your family. Creditors may also have claims against estate assets before your family receives anything.

Naming a beneficiary directly usually avoids these complications.

Special considerations for minor children

In most Canadian provinces, insurance companies cannot pay a death benefit directly to a minor. If you name a child under 18 (or the applicable age of majority) without also naming a trustee, the insurer may pay the funds to the provincial public trustee — who holds them until the child reaches adulthood.

To avoid this, consider naming a trusted adult as trustee for the benefit of the child, or establishing a formal trust arrangement. A qualified insurance or legal professional can help structure this appropriately.

Keeping your designation current

Major life events are a natural prompt to review your beneficiary designation:

• Marriage or a new common-law relationship
• Separation, divorce, or the end of a partnership
• Birth or adoption of a child
• Death of a named beneficiary
• Significant change in your estate plan
• Change in your relationship with the named person

In some provinces, divorce automatically revokes a former spouse as beneficiary — but this varies. Do not assume your designation is current; ask your insurer to confirm.

Quebec: distinct rules apply

Quebec follows civil law, and insurance beneficiary rules differ meaningfully from common-law provinces. For example, the concept of "married or civil union spouse" as preferred beneficiary (and the resulting irrevocability by default) applies differently under the Quebec Civil Code. If you live in Quebec, consult a professional familiar with provincial rules.