Naming Beneficiaries for Life Insurance in Ontario: A How-To Guide
Hi, I’m David Pipe, founder of WealthTrack. When it comes to life insurance, most Ontarians focus on the policy—but overlook one of the most critical steps: naming the right beneficiary. Get it wrong, and your money could be tied up in probate, claimed by the wrong person, or delayed for months—just when your loved ones need it most.
This guide cuts through the confusion and shows you exactly how to name or update a life insurance beneficiary in Ontario, what legal pitfalls to avoid, and how to make sure your money ends up in the right hands, fast.
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What Is a Life Insurance Beneficiary?
A beneficiary is the person (or people) who will receive the death benefit from your life insurance policy. In Ontario, this can be:
A spouse
A child or children
A friend or relative
A charity or organization
Or even your estate
You can name one or multiple beneficiaries, and you can decide how the death benefit should be divided among them.
Who Can You Name as a Beneficiary in Ontario?
In Ontario, there are no strict limitations on who you can name as a beneficiary—as long as the person is legally capable of receiving a financial benefit. You can choose:
Individuals (spouse, child, parent, friend)
Corporations or charities
Your estate
That said, minors (under 18) present a complication. If you name a child as a beneficiary without appointing a trustee, the money may be held by Ontario’s Office of the Children’s Lawyer until the child turns 18, which could lead to delays and complications.
👉 Tip: If naming a child, consider setting up a trust or appointing a trustee in the policy to manage the funds.
Revocable vs. Irrevocable Beneficiaries in Ontario
When naming a beneficiary in Ontario, you'll be asked to designate them as either revocable or irrevocable:
🔁 Revocable
You can change the beneficiary at any time without their consent. This is the default option.
🔒 Irrevocable
You cannot change the beneficiary without their written permission. This offers more security to the beneficiary but limits your control over the policy.
Many people mistakenly choose “irrevocable” when they don’t need to, not realizing it locks in that person permanently unless they agree to be removed.
How to Name a Beneficiary in Ontario
Naming a beneficiary typically happens during the application process, but you can change it at any time. Here’s how:
During Application
Your insurance provider will include a section where you list your chosen beneficiary or beneficiaries.
You will also choose revocable or irrevocable status.
After the Policy Is Issued
Contact your insurance company to request a Change of Beneficiary form.
Submit the completed and signed form as per their instructions.
👉 Note: In Ontario, verbal instructions or written mentions of a beneficiary in your will do not override the designation in your insurance policy. The form submitted to the insurer is legally binding.
Can You Name Your Estate as the Beneficiary?
Yes—but with caution.
If you name your estate as the beneficiary:
The payout becomes part of your probate estate
It may be subject to Ontario probate fees
Creditors can make claims against it
Naming an individual as a beneficiary usually allows the money to bypass probate and go directly to the person, often within a few weeks.
Tax Implications in Ontario
In Canada, life insurance death benefits are generally tax-free for beneficiaries. However, some complications may arise:
If your estate is the beneficiary, the funds may be taxed as part of estate administration.
If the beneficiary is a U.S. resident or foreign national, additional reporting may be required.
If the policy is part of a corporate structure or business, there could be tax consequences.
It’s best to speak to a financial planner or estate lawyer if you're unsure how taxes may apply in your situation.
Common Mistakes to Avoid
❌ Not Updating Your Beneficiaries After Major Life Events
If you’ve divorced, remarried, or had children and haven't updated your beneficiary, your payout may go to someone you didn’t intend.
❌ Naming a Minor Without Appointing a Trustee
As mentioned earlier, if you name a child under 18 and don't appoint a trustee, the funds may be tied up by the courts.
❌ Choosing “Irrevocable” By Mistake
Many people don’t realize that naming someone as irrevocable makes it legally difficult to change the beneficiary later.
❌ Relying on Your Will
Your will does not override a named beneficiary on your policy. The insurance company’s records are what matter.
What Happens If You Don’t Name a Beneficiary?
If you don’t name a beneficiary, the death benefit will automatically go to your estate. This can lead to:
Probate delays
Higher fees
Creditors accessing the funds
To avoid these issues, always ensure that a living, specific beneficiary is named on your policy.
Frequently Asked Questions (FAQ)
❓ Can I name more than one beneficiary?
Yes. You can name multiple beneficiaries and assign each a percentage of the payout (e.g., 50/50, 70/30, etc.).
❓ Can I change my beneficiary later?
Yes—if they are revocable. If irrevocable, you’ll need their written consent to make any changes.
❓ What if my beneficiary dies before me?
If no contingent (backup) beneficiary is named, the benefit typically goes to your estate. You should update your beneficiary list when major life changes occur.
Final Thoughts
Naming a beneficiary for your life insurance policy is more than just a checkbox—it’s a key part of your financial and estate planning. In Ontario, understanding the difference between revocable and irrevocable designations, knowing how to name minors properly, and keeping your policy up to date can prevent major complications for your loved ones down the road.
Whether you're buying life insurance for the first time or reviewing an older policy, now is the perfect time to review your beneficiary designation and ensure it aligns with your wishes.
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