What is a beneficiary?
In the context of Justworks, a beneficiary is any person or entity who is eligible to receive distributions from a life insurance or accidental death and dismemberment (AD&D) policy in the event of the policyholder’s passing.
If you have a Basic Life, Basic AD&D, Supplemental Life or Dependent Supplemental Life policy with Justworks, you can add manage beneficiaries in Justworks.
How do I add beneficiaries?
To add beneficiaries, navigate to your Benefits and then Ancillary Benefits. On the top right corner of each eligible ancillary benefit (Basic Life, Basic AD&D, Supplemental Life or Dependent Supplemental Life), you will see a link that says ‘Add Beneficiaries.’
That link will take you to your policy’s beneficiaries. On this page, you’ll be able to add both primary and contingent beneficiaries to this specific policy.
If I have multiple policies, do I need to add beneficiary to each one?
Yes. The beneficiaries of each policy are independent from each other. Please visit each policy individually and add beneficiaries for each policy.
Why can’t I add beneficiaries to my Short-Term Disability and Long-Term Disability policies?
With Short-Term Disability and Long-Term Disability, the benefits are not tied to your passing. The benefits for these policies are tied to you becoming disabled and you will be the beneficiary of these benefits for these policies.
What’s the difference between a primary and a contingent beneficiary?
Primary beneficiaries are the first people or entity to receive the benefit payout in the event of your passing. If all primary beneficiaries have passed, then your contingent beneficiaries will receive the benefit payout. If you name your estate a primary beneficiary, you cannot designate a contingent beneficiary.
Can I change my beneficiaries at any time?
Yes, you can update your beneficiaries at any time. Just visit your Benefits in Justworks and then click on the appropriate policy to update your beneficiaries.
What happens if my primary beneficiary passes away before me?
If you have a primary beneficiary who predeceases you, the benefits will go to the next beneficiary on your list. If you have other primary beneficiaries, the share of the predeceased beneficiary will be split evenly among the remaining primary beneficiaries.
If you did not designate additional primary beneficiaries, then the benefit will be given entirely to your contingent beneficiaries.
What happens if I don’t add a beneficiary?
This varies depending on the type of policy you have.
For Basic Life and Basic AD&D insurance, your employer will receive this benefit on your passing. We highly encourage you to add a beneficiary now, even if it is just your estate.
What are the differences between the beneficiary types?
There are five different types of beneficiaries you can add to your policies: Person, Estate, Testamentary Trust, Living Trust and Charity.
Person: A person is any individual. If you’d like to leave the proceeds of your policy to specific individuals, you will need to provide identifying information such as their name, social security number, address and telephone number.
Estate: An estate is all your goods and assets at the time of death. If you leave your policy to your estate, then it will be divided according to your will or by law if you fail to write a will. If you designate your estate as the primary beneficiary, you cannot add a contingent beneficiary since there is no scenario where your estate will not exist at the time of your death.
Testamentary Trust: A testamentary trust goes into effect upon an individual's death and is commonly used when someone wants to leave assets to a beneficiary, but doesn't want the beneficiary to receive those assets until a specified time. If you leave your policy to a testamentary trust, the proceeds from your policy will follow the instructions in your will.
Living Trust: A living trust is a property interest created during a person's life that allows easy transfer of assets without going through the process of probate. A living trust is an agreement where the trustee holds the legal possession of a fund or assets that belong to another person, the beneficiary, and it is created while the person is alive.
Charity or Organization: A charity, nonprofit, business or other organization that you’d like to donate the proceeds to. In order to pick this type, you will need to know the organization’s Employer Identification Number.
I added my Estate as a primary beneficiary. Why can’t I add a contingent beneficiary?
If you designate your estate as the primary beneficiary, you cannot add a contingent beneficiary since there is no scenario where your estate will not exist at the time of your death.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.