Succession Beneficiary Clause

What Does Succession Beneficiary Clause Mean?

A succession beneficiary clause is a provision in a life insurance policy that outlines the process for revoking the current designated beneficiary and appointing a successor beneficiary.

Insuranceopedia Explains Succession Beneficiary Clause

To change the beneficiary designation, the insured typically needs to submit a written notice. Most insurers provide specific forms for this purpose. In some cases, the policy contract must also be returned for the change to take effect.

Updating a designation through this clause is one of the more common beneficiary designation mistakes people make when their circumstances change, such as after a divorce or the birth of a child, since a forgotten or outdated name will still control who receives the payout. When the insured dies, the successor named under the clause is the person who files the claim and follows the insurer’s process for how beneficiaries actually receive a payout.