Choosing who will receive your life insurance benefit is one of the most important decisions you make when setting up a policy. For many parents, relatives, and even godparents, the natural instinct is to list the child they love most. That leads to a common question: Can a life insurance beneficiary be a minor?
The short answer: yes, you can name a minor — but the insurance company cannot pay the benefit directly to them.
This triggers legal procedures that delay access and place the funds under court oversight until the child reaches the legal adult age (18 or 21 depending on the state).
The good news is that you’re not stuck with that default process. There are far better ways to protect a child’s financial future without involving the courts or creating extra complications for your family. This guide explains how it all works, what to avoid, and the safest ways to structure your policy.
Although you’re allowed to list a child as a beneficiary, a life insurance company legally cannot release the death benefit to someone who hasn’t yet reached the adult age threshold.
Why? Because minors can’t:
enter binding financial contracts,
manage large sums of money responsibly under the law,
accept legal liability for investment or tax decisions.
If a minor is listed as the beneficiary, the insurer is obligated to pause the payout until a legally recognized adult is assigned to manage the funds.
This creates delays and court involvement — something most families would prefer to avoid.
If an insured person passes away and a child is the listed beneficiary:
The death benefit is held
The insurer cannot pay it out until an adult custodian or conservator is legally established.
The court steps in
A judge appoints someone to manage the funds — which may or may not be who you would’ve chosen.
The adult manages the funds until the child reaches the legal adult age
This may include reporting requirements and legal oversight.
Funds transfer automatically once the child becomes a legal adult
No restrictions apply once they reach that age.
This process is functional — but rarely ideal. Most people want a smoother, clearer plan.
Instead of naming a minor directly, here are the recommended alternatives.
(Simple, fast, and attorney optional)
One of the easiest and most common solutions is to name a custodian under the UTMA (Uniform Transfers to Minors Act) or UGMA (Uniform Gifts to Minors Act). Most states have adopted UTMA.
A UTMA/UGMA custodian:
is a specific adult you choose
manages the death benefit for the child
can use funds for the child’s needs
releases the remainder when the child becomes a legal adult
This avoids court involvement entirely.
Your life insurance application will typically include a field such as:
“Custodian for Minor Under UTMA/UGMA”
You list:
The child’s name
The custodian’s full legal name
The state law governing the custodianship
Example:
“Michael James, as custodian for Noah Alvarez under the Arizona UTMA.”
No attorney is required — though consulting one is always wise if you have questions.
(Best for customization and long-term planning)
A trust gives you the greatest amount of control over:
how the money is used,
who manages it,
when and how distributions occur,
how long the funds are protected.
Two types of trusts can be used:
Revocable Living Trust
Testamentary Trust (created by your will)
You name the trust — not the minor — as the beneficiary on your policy.
The trustee (someone you appoint) then follows the rules you set.
Trusts are especially powerful for:
blended families
godparent scenarios
large benefit amounts
long-term protection
children with special circumstances
Attorney involvement is strongly recommended for creating a trust.
This ensures clarity and proper legal structure.
(Useful in some cases, but less secure)
Some people choose an adult beneficiary — such as a parent, godparent, or sibling — with the understanding they will use the money for the child.
This can be simple, but comes with risks:
Legally, the adult owns the funds.
Their debts, relationships, or personal decisions could affect the money.
There is no enforceable guarantee the child receives it.
If choosing this route, it’s best to pair it with a written estate plan and legal guidance.
Even if your primary beneficiary is an adult, naming a minor as a contingent beneficiary will still trigger the same limitations when that adult cannot accept the benefit.
If you want to leave written instructions for how funds should be used, you can create a non-binding letter of intent. This works best when paired with a UTMA custodian or trust.
An estate planning attorney can:
review your beneficiary designations
assist with trusts or custodial arrangements
ensure everything aligns with state laws
help prevent unintended outcomes
When minors are involved, even a short consultation can save your family enormous stress.
Yes, a minor can be named — but they cannot legally receive the benefit.
If the goal is to protect a child’s financial future, the best solutions are:
A UTMA/UGMA custodian
A trust
A carefully chosen adult beneficiary (when appropriate)
Attorney review where helpful
These options ensure smooth payouts, clear management, and no court involvement.
So, can a life insurance beneficiary be a minor?
Yes — but naming a child directly usually causes avoidable complications.
The safer, smoother approaches are:
naming a custodian,
establishing a trust,
or structuring the benefit through a trusted adult with proper guidance.
These methods ensure the child is supported exactly the way you intend — with no delays and no surprises and no matter if it's an IUL, Whole Life, or Term.
A little planning now protects them later in the way that matters most.
If you need any help navigating how to setup your beneficiaries, we can help guide you with all of your options and at no extra cost to you (Click Here). And also, if you ever want to get your kids started on life insurance of their own (get's them started with a sort of savings account), check out how that works here: Whole Life For Kids.
Can a life insurance beneficiary be a minor? Yes — but children can’t legally receive the payout directly. This guide explains what really happens, how to avoid court delays, and the safest ways to leave life insurance to a child using a custodian, trust, or designated adult. Perfect for parents, guardians, and godparents planning ahead.
Permanent Life Insurance offers more than coverage — it’s a lifelong plan for stability and peace of mind. With guaranteed protection, level premiums, and tax-deferred cash value, it helps you safeguard your family and build financial strength that lasts a lifetime.
Difference between term and whole life insurance. Choosing between term and whole life insurance can shape your family’s financial future. This guide breaks down the differences, pros and cons, and proven strategies for both.
What is whole life insurance? Whole life insurance offers more than just lifelong coverage—it builds cash value, creates wealth opportunities, and provides lasting protection. This guide explains what a whole life policy is, how it works, and strategies for making the most of it.
Final expense insurance—also called burial or funeral insurance—provides affordable, permanent coverage for end-of-life costs. This guide explains how it works, what it covers, and why it can ease the financial burden on your loved ones.
What is an IUL? Indexed Universal Life (IUL) insurance combines lifelong protection with market-linked cash value growth. This guide explains how an IUL works, its pros and cons, and strategies for using it as part of a financial plan.
What is term life insurance? Term life insurance is simple, affordable coverage that protects your family for 10–30 years. This guide explains how it works, its pros and cons, and strategies for using it.
What are living benefits? Living benefits turn life insurance into more than just a death benefit. They let you access funds while alive if you face illness or long-term care needs. This guide explains what living benefits are, how they work, and secrets on how to make them work for you.
Life Insurance 101 covers everything you need to know about protecting your family. Learn the basics of term, whole, IUL, final expense, mortgage protection, and living benefits—all explained simply with strategies for choosing the right policy.
Is Life Insurance Taxable? Most life insurance payouts are tax-free, but there are exceptions. This guide explains when life insurance is taxable, when it isn’t, and strategies to protect your family from unnecessary taxes.
Can a life insurance beneficiary be a minor? Yes — but children can’t legally receive the payout directly. This guide explains what really happens, how to avoid court delays, and the safest ways to leave life insurance to a child using a custodian, trust, or designated adult. Perfect for parents, guardians, and godparents planning ahead.
Permanent Life Insurance offers more than coverage — it’s a lifelong plan for stability and peace of mind. With guaranteed protection, level premiums, and tax-deferred cash value, it helps you safeguard your family and build financial strength that lasts a lifetime.
Difference between term and whole life insurance. Choosing between term and whole life insurance can shape your family’s financial future. This guide breaks down the differences, pros and cons, and proven strategies for both.
