Life insurance: don’t forget to modify your beneficiary clause in these situations

Is the beneficiary clause of your life insurance still up to date? Many life events (marriage, divorce, birth, death, etc.) affecting you or your loved ones may indeed make it necessary to change it. Here are some of those key moments that should alert you to the need to take a look at your contract.

Capital Video: Life insurance: you must not forget to change your beneficiary clause (1)

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In terms of inheritance benefits, life insurance remains an unbeatable savings product. One of the reasons why it remains the preferred investment of the French with nearly 2,000 billion euros in assets. As a reminder, upon the death of the contract subscriber, payments made before the age of 70 entitle each beneficiary to a reduction of 152,500 euros.. It is only then that non-inheritance and reduced taxation applies: 20% up to 700,000 euros transferred, then 31.25% beyond that.

However, for the person of your choice to benefit from these advantages, they must be designated as the beneficiary of your capital upon your death. To do this, you must ensure that your beneficiary clause is carefully drafted. But above all, we think less about it, not to forget to change it when necessary. “Arrival of children, marriage, divorce, remarriage, death of a loved one… These are all life events which require verification that it is always the right people who are designated by its beneficiary clause, and that the distribution between she is always the one we want», Confirms Nathalie Couzigou-Suhas, notary in Paris.

How to properly designate your spouse in your beneficiary clause?

Let’s take a few examples. Initially, all life insurance contracts have a standard clause, which designates “your spouse, failing that your children, failing that your heirs” as beneficiaries. If you are not married or in a civil partnership, for example, it is recommended to switch to a nominative clause, to specifically designate your partner. Indeed, if you have children with him or her, and you die suddenly, your partner will not receive anything, because they were not your spouse.

Similarly, imagine a man who gets married and decides to change the clause to refer to his wife. In the event of subsequent divorce, if the subscriber is living with another person at the time of his death, the latter will receive nothing, because the designated person will always be his ex-wife. In the event of divorce, it is therefore better to name the person with whom you live if you are not remarried. If, on the contrary, the subscriber has a new wife, he will have to think about rewriting “my spouse” in the clause, which will allow the new spouse at the time of death to be the beneficiary of the capital…

Pay attention to life events that also affect those close to you

If these major life events should serve as an alarm for you to check your beneficiary clause, this should also be the case for events that affect your loved ones or designated people. For example, if you designate your children and one of them dies prematurely, their children (your grandchildren) will not become beneficiaries in their place. “Insurance law differs from inheritance tax. In this specific case, the capital intended for the deceased child will be transferred to his brothers and sisters only.recalls Master Couzigou-Suhas. You must therefore think about naming your grandchildren when your child dies.

Likewise, one must take into account, at the end of one’s life for example, what has already been transmitted during one’s lifetime. “If for example, one had designated one’s spouse and children and the latter were ultimately provided as a donation, it is perhaps more the surviving spouse who will need capital at the end of life», notes Nathalie Couzigou-Suhas. In this case, again, modification of the beneficiary clause, or at least of the distribution, may be necessary.

However, you should not go into a frenzy of modification. For example, it is advisable, in a nominative clause, to indicate the address of the beneficiary. It is not necessary to modify it each time you move: “Even if the address has changed at the time of death, the clause will not be void as a result.reassures Nathalie Couzigou-Suhas. Indicating at least one of the addresses that the person has had during their life can make it easier to find them.”