let's spend a few minutes uh talking about uh beneficiaries as you know when you purchase a life insurance policy uh you have the ability to name a beneficiary this is the person that are going to is going to receive the proceeds in the event of your death and so when we talk about beneficiaries uh it's important to know that a beneficiary is not a party to the contract they have certain rights of course but they're not a party to the contract and one of the main reasons for that is that you can change the beneficiary at anytime and we'll talk about uh revocable and irrevocable beneficiaries in a minute but fundamentally uh beneficiaries are not a party to the contract uh any def any designation of a beneficiary if you want to appoint a beneficiary it must be in writing and most of time we will put a beneficiary in the application for insurance and so that will be registered with the insurance company as the owner of the policy I have the right to change that beneficiary at any time and so I can name a different person in fact I can name my estate as the beneficiary and so instead of naming an individual I can say in the event of my death the proceeds of the policy should be payable to my estate and in in fact will be distributed under my will as part of my estate uh it's interesting also to note that I actually can change the beneficiary designation in my will so if I appointed a beneficiary uh when I bought the policy and I've put the beneficiary's name on the application years or sometime later I can decide to change that beneficiary I can either notify the company and say I'm going to change the beneficiary to to this person or to my estate or I can put that in my will and so in my will I can actually go through and make a beneficiary change under the terms of my will uh and so when the insurance company is processing a claim they're going to look at which document was filed uh the latest and the latest date and that is the uh beneficiary designation that will apply so I also can have multiple beneficiaries to my policy so I can say I'm going to leave 20% to this person 60% of that person uh it doesn't only have to be one person let's talk about uh categories of beneficiaries uh there are uh special treatment available for beneficiaries of a preferred class so a preferred beneficiary is someone that is also referred to as a protected beneficiary or someone that's part of the family class beneficiary and usually preferred beneficiaries tend to be a spouse or common law spouse child grandchild or your parent of the child and the reason they are preferred is that if you have a policy uh and it you have a preferred beneficiary named on that policy your creditors that are people that you owe money to if the policies is on your life uh they cannot go after the proceeds of that policy in order to settle your personal debt and so by naming a preferred beneficiary uh any of the death benefit or any of the cash value that might be in that policy is not accessible to your creditors again your creditors being people that you owe money to and so if you haven't paid your debts uh your creditor cannot expect to go after your death benefit under a life insurance policy or the cash value in your life insurance policy if you have a preferred beneficiary named on that policy and uh another key point with respect to uh beneficiaries is that the insurance company will in fact make the payment directly to the last individual or indication they have on their files if there's any uh uh body that's contesting that usually the insurance companies will pay the money into court and then have the people that are contesting it they're going to fight it out and figure out who is in fact uh the rightful uh owner or the rightful access to that uh information now two types of beneficiary designations that uh an owner can make the first is a revocable beneficiary a r a revocable beneficiary is a beneficiary that can be changed at any time in the future without requiring that beneficiary's permission and so as the owner you have full rights to change the beneficiary designation uh at any time that you want to uh alternatively an irrevocable beneficiary uh you can only make a change to the beneficiary with the cons ENT of that irrevocable beneficiary do not assume that simply because it's an irrevocable beneficiary you can't make a change you can make a change but you do need the consent and the approval of the irrevocable beneficiary that you had appointed and so that designation is usually filed uh with the insurance company and in addition to uh naming someone as an ovoc beneficiary and requiring their consent uh to make a change you also give up certain rights and so if you want to withdraw any cash from that policy you need to have the irrevocable beneficiaries consent if you want to assign the policy uh to a third party uh if you want to take out a loan or if you want to surrender that policy those activities require the consent of an a evocable beneficiary and so in addition to uh uh these rights that you're given up we also need to remember that once an irrevocable beneficiary has been named on a policy uh it automatically uh becomes we say creditor proof in others creditors cannot seize those assets because technically they belong irrevocably to that beneficiary