Can You Change the Beneficiary of Life Insurance With a Power of Attorney?

Your life insurance policy names one or more beneficiaries, people you've designated to receive the policy's death benefit when you die. If you grant someone else power of attorney, you give that person the right to make decisions for you. While someone to whom you have granted a POA may sometimes be able change your life insurance beneficiary, special rules often apply. Talk to a lawyer for legal advice about how to use a POA to give someone the power to change your beneficiary, or how to prevent someone to whom you've granted POA from doing so.

A POA is a legal document that can convey a wide range of abilities or rights. The person granting it, called a principal, can give as much or as little power as he wants. The person or organization receiving the power, called an agent or attorney-in-fact, can only do what the POA document allows. If the principal wants to allow the agent to change insurance beneficiaries, a POA can be drawn up that allows for it.

The widest possible grant of conveyed by a POA is in what's called a "general" POA. This gives the agent the right to do anything the principal can do, or anything the principal is legally allowed to delegate. Depending on the state in which you live, however, even a general POA may not be sufficient to give your agent the power to change your insurance beneficiary.

Some states limit what even a general POA can authorize an agent to do by identifying specific powers that must be granted in writing in the POA document. These "hot powers" vary between states, but often include creating or changing beneficiaries. For example, Virginia requires that even a general POA must explicitly grant the power to change insurance beneficiaries if that is the principal's intent.

Although POAs generally become effective as soon as the document is properly executed, you can specify different circumstances under which it becomes effective. For example, you can stipulate that a POA will become effective only if you are incapacitated. Upon execution of the POA, your agent has no power to do anything in your name unless and until you become incapacitated.