Let’s say that you have taken the responsible step and signed up for life cover or a pension fund. As you start filling in all the forms, you will undoubtedly reach the section about your beneficiaries. You might be tempted to write the first name that springs to mind, probably your partner or child, before moving on. Simple, right? 

Not always. 

Naming a beneficiary may seem like a quick admin task, but in reality, it is a legally binding decision with long-term consequences. If you and your partner aren’t aligned on who’s listed, what’s included, and why, it could lead to confusion, disputes, or even unexpected financial hardship after death.  

It’s time to have that conversation. 

What Is A Beneficiary? 

A beneficiary is the person or people who will receive the proceeds of your insurance policy, retirement annuity, pension, or investments when you pass away. This means they might inherit anything including your life cover pay-out, your car or home, depending on what you have specified in your Will. 

This decision is not just about who you trust, it’s about who will actually need financial support, and who you want to carry out your wishes. 

Why Couples Need To Talk 

If you are in a committed relationship, especially one with shared responsibilities (children, a home, bills), it is critical that you and your partner know and agree on each other’s beneficiary decisions.  

There are a few reasons why, starting with the fact that assumptions aren’t reliable. You see, your partner may assume that they are listed as your sole beneficiary, but if your mother, sibling, or ex is still on an old form, they could be in for a shock. Another reason is if you have a joint plan. You need to talk about if you are both naming each other, if you are including children or future guardians, and if there is a contingency for if you both pass away. 

Another reason why you need to discuss this in detail is because financial surprises hurt. You may believe you’ve left enough behind for your family, but unless it’s written into your documents and updated regularly, it might not reach them. Lastly, we would say that this conversation is vital if you and your partner aren’t married. Unmarried partners aren’t always recognised, and in some cases, common-law partners or long-term girlfriends/boyfriends may not automatically qualify unless explicitly listed. 

What You Should Discuss 

So, now that you know that you need to talk to your spouse or partner, what exactly is it that you need to talk about? We appreciate that these chats can be awkward, but if you use this list provided, you should be able to have an honest and productive conversation.  

Here’s a quick checklist of what to cover: 

1. Who is currently listed as your beneficiaries? It’s surprising how many people still have their parents or exes listed. 

2. What policies do you each have? Life insurance, income protection, funeral policies, pension funds – it all matters. 

3. Are your children financially protected? Consider guardianship plans and whether money will be made available for schooling or care. 

4. Who will manage the money? In some policies, you can name a trustee or stipulate how the money should be used. 

5. What’s the backup plan? If your primary beneficiary passes away before you, who gets the money? 

Having this conversation could prevent legal battles and heartache later. It also gives you both clarity and confidence about your financial future – and that is something that is certainly worth prioritising. 

Don’t Forget To Keep It Updated 

People’s lives change, Relationships end, families grow, finances evolve. It’s important to revisit your beneficiary forms every few years or whenever a major life change occurs. While you should update your Will, it’s crucial that you update each policy or fund individually, as beneficiary nominations often override the instructions in a Will. 

Feeling Informed? 

Money can bring out the best and the worst in people. But clear communication now can spare your loved ones from stress later. Remember, planning ahead doesn’t mean that you’re expecting the worst. It means you’re looking after the people you care about. Even after you’re gone. We trust that this information will help you make a decision that aligns with your financial goals and cares for your loved ones. 

Need help understanding your insurance, policies, or vehicle cover? Visit AA Inform for practical advice, tools, and trusted comparisons to make the right choices for your loved ones.