Life Insurance Beneficiaries in Kenya: Who Gets the Money and How to Avoid Family Drama

A man in Nakuru paid his life insurance premiums faithfully for 12 years.

KSh 8,000 a month. Never missed a payment. Never complained.

When he passed, his policy was worth KSh 6 million.

His wife expected to receive the money. So did his brother. And his mother. And his adult daughter from a previous relationship.

The result? A two-year court battle. Legal fees ate over KSh 800,000. Relationships were destroyed. The money that was meant to protect his family ended up dividing it.

His mistake? He never named a beneficiary.

Table of Contents

• What Is a Beneficiary?
• What Happens When You Don't Name a Beneficiary
  • The timeline gets ugly:
• How Kenyan Succession Law Distributes Assets
  • If you're survived by a spouse and children:
  • If you're survived by a spouse only (no children):
  • If you're survived by children only (no spouse):
• Five Common Mistakes Kenyans Make with Beneficiaries
  • ❌ 1. Not naming anyone at all
  • ❌ 2. Naming "my family" or "my children" without specifics
  • ❌ 3. Forgetting to update after major life events
  • ❌ 4. Naming a minor without a trustee
  • ❌ 5. Not telling anyone about the policy
• How to Name Your Beneficiary (Step by Step)
  • Step 1: Decide who needs the money most
  • Step 2: Choose primary and contingent beneficiaries
  • Step 3: Assign percentages
  • Step 4: Use full legal names and ID numbers
  • Step 5: Name a trustee for minor children
  • Step 6: Review annually
• Does a Will Override a Beneficiary Designation?
• A Word on Polygamous and Customary Marriages
• Final Word

What Is a Beneficiary?

A life insurance beneficiary is the person (or people) you officially designate to receive the payout when you die.

It's that simple. You name them on your policy form. When you pass, the insurer pays them directly.

No court orders. No family meetings. No drama.

The beneficiary designation on your insurance policy is one of the most powerful legal documents you'll ever sign. And most people treat it as an afterthought.

What Happens When You Don't Name a Beneficiary

If you die without naming a beneficiary, your life insurance payout goes into your estate. That means it's now subject to:

• Kenya's Law of Succession Act
• Potential probate proceedings
• Court-appointed administrators
• Claims from multiple family members

The timeline gets ugly:

• Obtaining letters of administration: 3–12 months
• Resolving disputes: 6 months to several years
• Legal fees: 10–20% of the estate value (sometimes more)

Meanwhile, your family — the people the money was meant to help — are waiting. Grieving. And broke.

How Kenyan Succession Law Distributes Assets

If you die without a will (intestate), the Law of Succession Act kicks in.

For most cases, here's the rough breakdown:

If you're survived by a spouse and children:

• Spouse gets the personal and household effects absolutely
• Spouse gets a life interest in the rest of the estate (meaning they can use it, but don't fully own it)
• Remainder goes to the children in equal shares

If you're survived by a spouse only (no children):

• Spouse gets the first KSh 10,000 absolutely (yes, that amount hasn't been updated since the 1980s)
• Spouse gets 20% of the remainder
• Rest goes to the deceased's parents, siblings, or other relatives

If you're survived by children only (no spouse):

• Children inherit in equal shares

Here's the thing: this is generic distribution. It doesn't consider who actually needs the money most. It doesn't factor in your intentions. It just follows a formula.

That's why naming a beneficiary matters — it puts you in control.

Five Common Mistakes Kenyans Make with Beneficiaries

❌ 1. Not naming anyone at all

This is the most common and most expensive mistake. The Nakuru story at the top of this article? It happens more than you'd think.

❌ 2. Naming "my family" or "my children" without specifics

Insurers need full names and ID numbers. Vague descriptions lead to disputes. Which children? Born to which relationship? The policy form requires precision.

❌ 3. Forgetting to update after major life events

Got married? Had another child? Got divorced? Your beneficiary form needs to reflect your current situation, not the one from five years ago.

This one causes real pain. Imagine your ex-spouse receiving your life insurance payout because you never updated the form. Your current family gets nothing.

❌ 4. Naming a minor without a trustee

If you name your 5-year-old as a beneficiary, who manages the money until they're 18? You need to name a trustee or set up a trust. Otherwise, the court appoints a guardian — and that process is slow and costly.

❌ 5. Not telling anyone about the policy

Your family can't claim what they don't know exists. Make sure at least one trusted person knows:

• That the policy exists
• Which insurer it's with
• The policy number
• Where the documents are

How to Name Your Beneficiary (Step by Step)

Step 1: Decide who needs the money most

Think practically. Who depends on your income? Who would be most affected financially by your death?

Step 2: Choose primary and contingent beneficiaries

Don't just pick one person. Always have a backup.

Step 3: Assign percentages

If naming multiple beneficiaries, decide how to split. Write exact percentages — don't leave it open to interpretation.

Step 4: Use full legal names and ID numbers

"My wife" is not enough. Use: Jane Wanjiku Kamau, ID No. 12345678.

Step 5: Name a trustee for minor children

If any beneficiary is under 18, designate a trusted adult to manage the funds on their behalf.

Step 6: Review annually

Set a calendar reminder. Every year, check that your beneficiary designations still match your intentions.

Does a Will Override a Beneficiary Designation?

Here's something that surprises many people:

In most cases, the beneficiary designation on your insurance policy takes precedence over your will.

If your will says "everything goes to my wife" but your policy names your brother as beneficiary, your brother gets the insurance money.

This is because life insurance proceeds are typically considered a contractual obligation, not part of the estate. The insurer pays the named beneficiary, period.

That's why it's so important to keep both your will and your beneficiary forms aligned. Read more about life insurance basics to understand how all these pieces fit together.

A Word on Polygamous and Customary Marriages

Kenya recognizes multiple forms of marriage:

• Civil marriages
• Customary marriages
• Islamic marriages

Under the Law of Succession Act, all recognized spouses have rights to the estate. This makes beneficiary naming even more critical in blended or polygamous families.

Be explicit. Be specific. Put it in writing. Leave no room for interpretation.

Final Word

Life insurance is one of the most generous things you can do for your family. But a policy without a clear beneficiary is like buying someone a gift and locking it in a safe with no combination.

The money is there. But nobody can access it when it matters.

Take 10 minutes. Review your policy. Name your beneficiaries. Update the form. And tell someone you trust where to find the documents.

That 10-minute task could save your family years of pain.

🟢 Learn more about protecting your family the right way. Read our detailed guide on Life Insurance Beneficiaries and brush up on Life Insurance Basics to make sure every piece of your plan is in order.