The owner of a life insurance policy normally retains the right to change the beneficiary. If so, he or she can remove not only the original beneficiary but also any successor beneficiaries that have been appointed. The policyowner may relinquish this right by a policy endorsement or by a collateral assignment of the policy. The right to change the beneficiary is a matter of contract, and the insurance company cannot refuse to assent to a change of beneficiary on the ground that the prospective beneficiary has no insurable interest or on any other ground. On the other hand, the company can�and does�prescribe the procedure the policyowner must follow to effect a change of beneficiary. Following the procedure is also a condition of the contract.

All insurers require written notice of a change of beneficiary, and a few specify that the change must be endorsed on the policy. Most insurers, however, merely require that the policyowner�s written request be received and filed by the insurer. Filing is preferred over the endorsement method because there are occasionally situations in which the insured is not able to produce the policy for endorsement. It may have been lost, or it may be in the possession of a person who refuses to release it�an estranged or divorced spouse, for example. In such cases, the company may recognize the change of beneficiary despite the lack of formal compliance with the procedural requirements, but it would probably do so only if the insurer were satisfied that there is no danger of the prior beneficiary�s establishing a claim. The courts have consistently held that the policy provisions concerning change of beneficiary are for the protection of the company and can be waived under proper circumstances.

Divorce between the insured and the beneficiary deserves special mention. The general rule in all states except Michigan is that divorce in itself does not terminate the beneficiary�s interest. This is based on the doctrine that the interest of a named beneficiary is a personal one, not dependent on the relationship to the insured that may have been stated in the designation. Thus a beneficiary designation that reads "to my wife, Emily" remains payable to Emily even after a divorce and the husband-insured�s remarriage to another woman. In Michigan, a statute provides that a spouse�s interest is automatically terminated by divorce, regardless of whether the spouse was revocably or irrevocably designated. Unless the court decree specifies otherwise, the insured�s estate then becomes the beneficiary.