The relationship between children and beneficiaries of life assurance

Life assurance policies taken out in Spain are subject to Spanish law, even if both the policy holder or insured party and the beneficiary are foreign nationals.  The law rules how the designation of a particular beneficiary must be interpreted.

According to the law, if a person’s children are designated the beneficiaries, it is understood that by ‘children’ what is meant is all descendants with a right of inheritance.  However, if the designation favours the heirs of the policy holder, the insured party or any other person, the ‘heirs’ are those who are considered as such at the time the insured party died.  In this provision, the law distinguishes between children and heirs with regard to the beneficiary of the insurance policy.  While the heirs must be the universal successor of the deceased (usually the policy holder) at the time of their death (in the case of life assurance, the policy holder and insured party are usually the same person), the children are the beneficiaries irrespective of whether or not they are the universal successors of the policy holder or insured party.  Beneficiaries who are simultaneously heirs (by way of a will or legal ruling) remain as such, even if they reject the inheritance.

If several beneficiaries are appointed, in the absence of a more detailed designation the sum will be divided into equal shares.  If the heirs are appointed the beneficiaries, the division will be carried out according to their share of the inheritance.  Shares which are not accepted by one beneficiary are divided among the shares of the other beneficiaries.

Acceptance of an inheritance is not required for the acquisition of an insurance payout.

Carlos Prieto Cid – Lawyer

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