The beneficiary is the person you choose to receive the death benefit from your life insurance policy, if you were to die.
The death benefit is usually paid out to the beneficiary free from any federal taxes.
The proceeds from a life insurance policy can be used by the beneficiary for any purpose, meaning the beneficiary choose how he or she will spend the money.
You may choose more than one beneficiary of your life insurance policy.
For instance, if you have two siblings or children, you may want each to receive a 50% share of the death benefit. You can usually choose an amount or a percentage that the beneficiaries each will receive upon your passing.
It's important to remember, if you have a life insurance policy, make sure the beneficiary knows where it is located so that person can find it and make a claim in case you die. Otherwise, the beneficiary may not know of the life insurance coverage, and may never receive the death benefit.
Learn more about beneficiaries to life insurance policies and how it works.