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Beneficiary clause

Beneficiary clause

The holder of the policy specifies to whom the insured death benefit or the insurance savings payable when the policy expires shall be paid. The holder of the policy can specify a natural or legal person as the beneficiary. 

The Insurance Contracts Act includes certain interpretation assumptions which are in principle abided by when applying the beneficiary clauses in question (spouse, children, spouse & children, next of kin). These are addressed below. The information is based on the legislation in effect on 1 October 2024. 

 

How is a beneficiary clause specified and how can it be changed?

  • The beneficiary clause is given to the insurance company in writing, for example, through the web service following authentication, or using a form.
  • The beneficiary clause cannot be specified, changed or revoked in a will.
  • The beneficiary clause can be changed or revoked by notifying the insurance company in writing, for example, through the web service following authentication, or using a form. 

Beneficiary of life insurance benefit

Clause for exclusion of marital rights

  • The beneficiary’s spouse’s marital right to the benefit paid under the insurance can be excluded when specifying the beneficiary clause. 
  • This clause excluding the marital right of the beneficiary’s spouse can also be added to the insurance later, after the beneficiary clause has been specified, in the form of a written notification.  
  • Mandatum does not oversee or bear responsibility for the practical implementation of this clause. 

Taxation of life insurance compensation

  • Life insurance benefits paid to next of kin on the basis of death are subject to inheritance tax. The highest tax rate applied is 19%. 
  • Next of kin are, for example, a spouse, children, grandchildren and parents. A benefit paid to a cohabiting partner is also subject to inheritance tax if the partners have lived together and have or have had a mutual child, or if they were previously married to one another. 
  • Life insurance compensation paid to a beneficiary other than next of kin is subject to capital gains tax.