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How life insurance works with wills

Feb 12, 2021 4 Minute Read

Writing your will and wondering if – and how – it should include your life insurance policy? Life insurance and wills are both an essential part of end-of-life planning and can work together to protect those you love.

Here’s what to know about how life insurance policies and wills work together. 

Is life insurance included in a will?

A will is a legal document that lays out your final wishes and leaves instructions on how to distribute your property after you die. Your will can cover things like whom you want to receive your personal items and money, how to pay remaining expenses, and who should care for any minor children.

When you die, your will distributes your assets to the people or organizations you’ve named in your will. There are some exceptions, though. A will can’t cover assets you own with other people, like a house, or assets with a beneficiary, like life insurance.

Can I use my will to distribute my life insurance?

When you buy a life insurance policy, you name a beneficiary (or beneficiaries) to receive the payout. Your beneficiary could be a partner, spouse, child, parent, or even an organization, like a charity. 

When you die, your life insurance payout goes to the person or people named on the policy. You can’t use your will to change the beneficiary named in your life insurance policy.

Your will directs probate or the legal process for distributing your assets. During probate, any assets not specifically bequeathed to certain people (like those pearls you promised your sister) are divided among all the beneficiaries of your will. 

Assets include anything of value that you own, which is why your life insurance death benefit doesn’t count during the probate process. Since your life insurance payout is meant for your life insurance beneficiary once you die and only payable after your death in most cases, it’s not typically considered an asset and not included in a will. 

There is one exception, though. If all of your beneficiaries die before you, then your life insurance will be paid to your estate and the terms of your will dictate how the proceeds are distributed.

Financial planning for the end of life

Even in the prime of life, writing a will and buying life insurance can both help you and your family prepare for the unexpected. Ideally, end-of-life planning happens well before the actual end of your life, giving you and your family the peace of mind that the life you’ve built together is protected. 

When it comes to providing financial security for the next generation, life insurance plays an important role. Since a life insurance policy isn’t part of your will, it can be a good way to leave money behind for family members because it won’t go through your estate and get reduced by any debts. 

If you’re still in the prime of life, term life insurance is the simplest and most cost-effective way to protect your family’s future. Term life offers coverage for a specific period of time, usually 10 to 30 years, to help your family replace your income, pay the mortgage or other debts, or make sure they have enough saved for retirement.

As you get older, final expense insurance can help you plan for funeral expenses or other costs that come up at the end of life. Designed for adults over 50, final expense provides a way for your family to pay for a funeral, burial or cremation, medical bills, and other expenses – without having to wait months for your estate to be settled in probate. 

Not sure which option is right for you? It can help to shop around, compare plans and use a life insurance calculator to figure out how much coverage you need. The agents at eFinancial can help you weigh the pros and cons of different policies to find the best fit for your family. 

Still have questions or want more information about life insurance beneficiaries and wills?

We’re here to help. eFinancial works with top-rated life insurance companies to help you find the right coverage for you and your family. Call us or start your quote online today.


At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.