Beneficiary clause
The designation of who receives the benefit on death, the single clause that decides who the contract serves and the one most often drafted in haste.
Law of December 17, 2007: acceptance by the beneficiary of a French life insurance policy now requires the policyholder's consent. Until then, a third party could accept alone and lock up a contract it had never paid into. The beneficiary clause names who will receive the capital or annuity on the insured's death. It is the weightiest provision in the contract, often dashed off in one line at signing. The beneficiary acquires a direct right against the insurer, and Article L. 132-12 of the Insurance Code places the sum outside the estate; in principle it escapes both forced heirs and creditors, unless the premiums were manifestly excessive (Article L. 132-13). Once the contract is accepted, it can no longer be surrendered, nor the designation changed, without the accepting beneficiary's consent. Poor drafting leads to predictable litigation: a beneficiary who died first with no substitution provided, a former spouse named by name after the divorce, a fallback in favor of the heirs left out.
France's act of December 17, 2007 made the beneficiary's acceptance conditional on the policyholder's agreement, ending a situation in which a third party could freeze a contract without the knowledge of the person funding it. The standard fallback wording, my spouse, failing that my children born or unborn, living or represented, failing that my heirs, exists precisely to cover the three situations fifteen years of life can produce.
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