What is a beneficiary and how do I nominate one?

A beneficiary is the person or entity you nominate to receive your life insurance payout when you die. In Australia, for retail policies held outside superannuation, you can nominate anyone as a beneficiary – spouse, children, other family members, friends, charities, companies, or the trustee of a trust. You simply specify them in your policy documents, and the insurer pays them directly upon your death, bypassing your estate and probate process. For policies held within superannuation, rules are stricter – beneficiaries must generally be your spouse, children, someone financially dependent on you, in an interdependency relationship with you, or your legal personal representative (estate). Superannuation offers three nomination types: binding nominations (legally binding on the trustee, must be followed, but 'lapsing' types expire after 3 years and need renewal), non-lapsing binding nominations (permanent until changed, though not all funds offer this), and non-binding nominations (trustee considers your wishes but has discretion in final distribution). For maximum control over who receives your life insurance proceeds, retail policies outside super are preferable. You can typically nominate multiple beneficiaries and specify what percentage each receives. It's crucial to keep nominations updated after major life events like marriage, divorce, births, or deaths. Review beneficiaries annually to ensure they reflect your current wishes and family situation.