Can a Minor Be the Beneficiary of a Life Insurance Policy? What Happens if the Payment Is Left to a Child?

Protecting children is one of the most common reasons people purchase life insurance. Naturally, many parents want their children to receive the life insurance payout if something happens to them. But while a minor can legally be named as a life insurance beneficiary, minors cannot directly receive life insurance money. This disconnect leads to confusion, delays, and, in many cases, long legal battles.

Our life insurance attorneys frequently assist families dealing with delayed life insurance payouts or probate complications because a child was listed as the beneficiary. Understanding the legal issues—and planning ahead—can prevent costly mistakes and ensure your children receive the financial protection you intended.

This guide explains:

• Whether a minor can be a beneficiary

• What happens when a child is named

• How life insurance companies handle payouts for minors

• The safest ways to leave life insurance money to children

• How to avoid probate, disputes, and delays

If your claim was delayed or denied because the beneficiary is a minor, call (888) 510-2212 for a free consultation.

Can a Minor Child Be a Life Insurance Beneficiary?

Yes. Minor children can legally be named as beneficiaries of a life insurance policy. Policyowners may name:

• A spouse

• Minor children

• Adult children

• Parents

• Siblings

• Friends

• A trust

• An estate or legal entity

Unless the policyholder made the designation irrevocable, they may change beneficiaries at any time.

But here’s the critical issue:

Insurance companies cannot release life insurance proceeds directly to a minor child.

A child cannot legally receive, manage, or control the funds until they reach the age of majority (18–21 depending on the state). This means naming a minor without further planning triggers legal complications.

Can a Young Child Be Named as a Contingent Beneficiary?

Yes. Many parents name the spouse as the primary beneficiary and the minor children as contingent beneficiaries. The children will only receive the funds if:

• The primary beneficiary predeceases the insured

• The primary beneficiary is unavailable

• The designation is revoked

When the contingent beneficiary is a minor, the insurer must place the death benefit in a custodial or court-supervised account until the child reaches adulthood. Without proper planning, this can cause delays, disputes, or court involvement.

What Is Considered a “Minor” for Life Insurance Purposes?

The legal age of adulthood varies by state and is determined by the Uniform Transfers to Minors Act (UTMA). Under UTMA, the age of majority is 18, 19, or 21, depending on the state.

This distinction matters because:

• Separated or divorced parents may live in different states

• The child’s state of residence typically controls the rules

• Custodial arrangements can affect how the payout is managed

What Happens When a Minor Is the Beneficiary?

If a policyholder names a minor as the beneficiary, the insurer cannot simply send the check. Instead, one of the following must happen:

1. A court must appoint a guardian

If the policyholder did not plan ahead, the claim often goes through probate court, where a judge appoints:

• A guardian of the child

• Or a guardian of the estate

This person will control the life insurance funds until the child becomes an adult.

Downsides of court involvement include:

• Long delays before the child receives financial support

• The court may appoint someone the parent never would have chosen

• A guardian may mishandle or overspend the money

• Probate fees and legal costs reduce the child’s inheritance

• Life insurance proceeds may become accessible to creditors

• All spending may require court approval

In our experience handling life insurance disputes, this is the costliest and most stressful way for minor children to receive the benefit.

How to Properly Name a Minor as a Life Insurance Beneficiary

Fortunately, there are several ways to ensure children receive the death benefit quickly, safely, and without legal obstacles.

1. Designate an Adult Guardian (Not Recommended)

In some states, a policyholder can name a trusted adult to act as the child’s guardian and receive the proceeds on behalf of the minor.

Benefits:

• Avoids court involvement

• Allows a parent to choose who controls the money

Risks:

• The guardian has full access to the funds

• Mismanagement or fraud is possible

• No legal requirement to follow the parent’s wishes

• The guardian may spend the funds improperly

Our life insurance lawyers rarely recommend this approach because the risks are significant.

2. Create a UTMA (Uniform Transfers to Minors Act) Custodial Account

A UTMA account is one of the simplest and most common solutions. The policyowner names a custodian—a trusted adult—to manage the money until the child reaches the age of majority.

How it works:

• The life insurance benefit is deposited into the UTMA account

• The custodian manages the funds for the child’s benefit

• When the child turns 18–21 (depending on the state), they receive full control

Advantages:

• Easy to set up

• Avoids probate

• Funds legally belong to the child

• Provides structure for financial management

Drawbacks:

• The child receives full control at adulthood, even if they lack financial maturity

• The funds cannot be restricted beyond the UTMA age

For many families, a UTMA is a smart and inexpensive planning tool—but not ideal if the parent prefers long-term control.

3. Name a Revocable Living Trust as the Beneficiary

(Best for large policies or long-term control)

Creating a revocable living trust gives the policyholder the highest level of control over when and how a child receives money.

How the trust works:

• The trust is named as the life insurance beneficiary

• A trusted adult (the trustee) manages the funds

• The trustee distributes the money according to the parent’s instructions

Advantages:

• Avoids probate court

• Protects children from mismanagement

• Provides long-term guidance

• Allows staged payments (e.g., at age 25, 30, or life milestones)

• Keeps the funds separate from creditors

• Protects children with special needs or financial vulnerabilities

Parents often choose trusts to:

• Prevent an 18-year-old from receiving a huge lump sum

• Provide support throughout childhood

• Ensure responsible money management

• Keep the life insurance proceeds available for education, housing, or health

A trust is the most flexible and protective option, especially for single parents, blended families, or larger policies.

Can Instructions in a Will Help Minors Receive Life Insurance Proceeds?

A will cannot override a life insurance beneficiary designation.
The policy always controls.

However, conflicts arise when:

• The will names a different person

• The will addresses guardianship but the policy does not

• The policy’s beneficiary designation contradicts the estate plan

To avoid litigation and high legal fees, the beneficiary designation and the will should always be consistent.

How to Ensure Minor Children Receive the Life Insurance Money Without Problems

Policyowners should never simply list a minor child’s name without planning for custody or management of the funds. Without proper planning, your child may face:

• Delays of months or years

• Probate court involvement

• Court-supervised guardianship

• Loss of funds to legal fees or debts

• Improper management by a court-appointed guardian

• Inability to access money when needed

To ensure the process goes smoothly:

✔ Set up a UTMA account
✔ Establish a revocable trust
✔ Name a responsible custodian or trustee
✔ Keep the beneficiary designation updated after divorce or relocation
✔ Review your estate plan every few years

When You Should Call a Life Insurance Lawyer

If your loved one passed away and the beneficiary is a minor, or if the insurer refuses to pay without court involvement, you should consult an attorney. Our life insurance lawyers help families:

• Avoid unnecessary probate

• Resolve disputes between guardians, relatives, or former spouses

• Navigate UTMA, trust, and estate issues

• Protect the child’s financial interests

• Fight delays and policy misinterpretations

We offer free consultations and contingency fee representation, meaning you pay nothing unless we recover the benefit.

Get Help Today

Designating minor children as life insurance beneficiaries can be tricky—without proper planning, it often leads to delays, court involvement, and financial hardship for the child. Our attorneys will help you understand your options, protect your children’s rights, and ensure they receive the benefit quickly and safely.

Call us at (888) 510-2212 for a free consultation with an experienced life insurance lawyer.