You can, but it may not be the best thing to do. A lot of people who have a life insurance policy have their spouse as primary beneficiary and their child named as a secondary beneficiary on the policy. If one spouse dies and the other remains, the insurance proceeds will go to the spouse if he or she is named as the primary beneficiary.
If you and your spouse were to pass away, then the listed secondary beneficiaries would be the recipients of the policy proceeds. If your child who is a beneficiary is 18 years of age or older then the money will pass directly to him or her. The challenge comes when your child is a minor, and he or she is the next in line to take under the life insurance policy.
Without proper planning, the Court will definitely decide who manages your child's money. If there is no personal representative named for the child in a will or a living trust, or if there is not an interested adult, the Court will appoint a personal representative who can then file a petition requesting that a conservator be appointed. A judge will hear testimony from all interested persons and decide who to appoint as the minor’s conservator. Once appointed by the Court, the conservator will manage and control the proceeds of the life insurance until the child is an adult.
An alternative to putting your minor child as a beneficiary on your life insurance policy is to put your living trust as a beneficiary. That way, if you want your child to have the life insurance proceeds and they are still a minor, your appointed Trustee will manage the funds according to the instructions set forth in your living trust.
For most living trust packages, you will have also appointed a Guardian and a Conservator of the minor child who may or may not be the same person that is acting as Trustee. Depending on the way your trust reads, the Trustee or the Conservator of your choice will handle the proceeds of the life insurance policy on behalf of your minor child until they become an adult.
With proper estate planning, your children can be taken care of according to your wishes and have a brighter financial future.
Should I Put My Child as a Beneficiary in My Estate Plan?