28th October, 2025
Life insurance is a vital part of many estate plans. However, many people misunderstand how it interacts with their Will. It is important to know whether your life insurance forms part of your estate-or sits outside it.
Does a Will Override a Life Insurance Beneficiary?
In most cases, your life insurance policy will not be covered by your Will. This happens when a beneficiary has been nominated on the policy. The insurer will then pay the life insurance proceeds directly to that person. As a result, those funds do not form part of your estate and are not distributed under your Will.
However, if no beneficiary is named, the proceeds will usually be paid to your estate. They will then be distributed according to your Will. Because of this, your choice of beneficiary can have a significant impact on how your assets are handled.
Why It Matters for Estate Planning
When creating an estate plan, many people assume their Will covers all their assets. Unfortunately, this assumption can lead to confusion. For example, if you nominate your spouse in your Will but your life insurance names your children, the insurer will pay your children directly. Consequently, your Will cannot override that nomination.
To ensure your estate plan works as intended, it’s essential to review both your Will and your life insurance policy together. Doing so can help align your intentions and prevents family disputes later on.
When Life Changes, So Should Your Policy
Life circumstances can change quickly. Divorce, new relationships, or the death of a nominated beneficiary may alter your intentions. Therefore, it’s important to regularly review your nominations. Updating these details ensures that your life insurance proceeds reach the right people.
If your policy is held through your superannuation fund, the process can be even more complex. In that case, you may need to make a binding death benefit nomination. Without it, the trustee of your super fund could decide how your insurance benefit is distributed.
How Our Firm Can Help
At Castrikum Adams Legal, our experienced Wills and Estate Planning lawyers in NSW can guide you through every step. Whether you’re in Byron Bay, Bangalow, Lismore, Ballina or Mullumbimby, we’ll help you understand how your life insurance fits within your estate plan. Most importantly, we ensure that your loved ones receive what you intend, without unnecessary stress or legal complications.
Whether you’re drafting a new Will or updating an existing one, we can assist. Contact our team today to discuss your estate planning and life insurance arrangements.
If you found this blog helpful, please check out our other blogs on Estate Planning.
The content of this Blog does not constitute legal advice, is not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any specific matters you or your organisation may have.