Probably the most important right that a policyholder has under a life insurance policy is to name a policy beneficiary, that is, the person or organization that will get the proceeds when the policyholder dies. Normally, the policyholder may change a beneficiary designation at any time, unless he or she has made the selection irrevocable.

When making a beneficiary designation, make sure that you follow the insurance company's rules to the letter. If you don't, the designation may be invalid. If you die without choosing a beneficiary, the proceeds will be paid to your estate. This will unnecessarily subject the proceeds to probate, and, particularly in those states that still levy a death tax, is normally not an arrangement that you would want.