Providing a list of primary beneficiaries is a major requirement when buying life insurance. Interestingly, naming beneficiaries is never an easy task for many people. Although most people would rather leave 100% of their death proceeds to one primary beneficiary, ignoring secondary and tertiary recipients can result in unnecessary complications later.

What are the different ways of splitting your life insurance payout among beneficiaries?

Well, most people are clueless as far as the division of a life insurance payout among a contingent of heirs is concerned. You probably want your grandchildren among others to have a share of your proceeds when you’re gone but don’t know how to make it happen. The most common ways of distributing a life insurance payout are per capita, per stirpes and a life insurance trust.

Per Stirpes

Dividing your life insurance proceeds through per stirpes basically means that the payout is to be split by the branch of your family. In other words; if you have 2 children, each is entitled to 50/50% of the proceeds provided he or she is alive. Nevertheless, if one of them predeceases you, their one-share of the proceeds is passed in its entirety to his/her children while the 2nd share will be inherited by your living son/daughter. In this approach, descendants of the deceased beneficiary are required by representation to equally share what their parent would have inherited had they been alive. As the insured, you have the right to update your life insurance proceeds intentions annually at your convenience.

Per Capita

In contrast to per stirpes, per capita, means your life insurance proceeds are to be divided by total headcount. This is to say that; all surviving members of your designated beneficiaries will each receive an equal share of the spoils irrespective of their number. Assume you have 5 living descendants. In such a scenario, each of them will receive an equal share of 1/5. Now, should one of them predecease you, the surviving 4 will each get a ΒΌ share? Generally, any predeceased descendant will not be included in your life insurance payout plans.

A life insurance trust

Alternatively, you can decide to designate a life insurance trust for your descendants if you don’t want to name either of them as primary beneficiaries. For this to happen, you’ll need to designate a trustworthy estate-planning attorney to oversee the trust.


Select a distribution method that compliments your intentions wisely to ensure that your beneficiaries get their shares as you desired. For more effectiveness, work closely with a vastly experienced, licensed and reputable estate planning attorney or insurance professional.