Per Stirpes vs Per Capita
Per Stirpes vs. Per Capita (Life Insurance Beneficiaries)
When setting up life insurance beneficiaries, you’ll likely see terms like per stirpes and per capita. They sound complicated, but these choices determine whether your grandchildren inherit if one of your children passes away before you. The wrong choice can unintentionally disinherit a branch of your family. This guide will break it down simply, with real examples to help you decide what fits your situation.
If you’re still shaping your coverage amounts, see how flexible layers work in our life insurance laddering guide before finalizing your beneficiary structure.
What Per Stirpes Means
Per stirpes means “by branch.” If one of your children dies before you, their portion of the life insurance payout goes to their children (your grandchildren). Each family branch keeps its intended share, even if a parent is no longer alive.
Families who want to ensure that a child’s lineage is always protected often use per stirpes. For example, if you’re caring for a child with medical complexities, review our guide on life insurance for autistic people to see how this approach supports long-term planning.
What Per Capita Means
Per capita means “by head.” If one of your children dies before you, their portion is redistributed equally among the remaining surviving beneficiaries. Their children (your grandchildren) won’t inherit unless they are also listed as named beneficiaries.
This works well when you want only the named individuals to receive proceeds, not automatic extensions to the next generation. But be careful: in some cases, it can exclude grandchildren unintentionally. If that worries you, a trust might be a better fit. For ideas, see our page on life insurance for parents with young children where estate liquidity is often considered alongside beneficiary rules.
Examples: How These Play Out
Example 1: You list two children, Emma and Noah, as equal beneficiaries.
- Per stirpes: If Emma dies first and leaves two kids, Emma’s 50% is split between them. Noah still receives 50%.
- Per capita: If Emma dies first, Noah inherits 100%. Emma’s kids inherit nothing unless they are also listed as beneficiaries.
Example 2: You want to balance a second marriage with adult children. Naming your spouse first and children as contingent per stirpes ensures grandchildren don’t lose their inheritance if their parent dies prematurely. When combined with policies designed for higher-risk cases, such as those we outline on high-risk life insurance strategies, it creates a durable plan.
Per Stirpes vs. Per Capita: Pros and Cons
- Per Stirpes Pros: Protects grandchildren, keeps money in each family branch.
- Per Stirpes Cons: Can create unequal “per head” distributions.
- Per Capita Pros: Simple, equal shares among survivors.
- Per Capita Cons: Can disinherit grandchildren of a deceased child unintentionally.
Still not sure? We’ll map scenarios for you, including estate and tax planning considerations. Many families layer this decision with annuity planning—if that’s you, read about annuity beneficiary death benefits to see how similar principles apply.
Talk Through Your Beneficiary Designations
Beneficiary decisions are permanent until you update them—don’t leave it to guesswork. Walk through your family structure with an advisor who has seen every scenario.
Get Clarity Before You Sign
We’ll show you the real-world impact of per stirpes vs. per capita, make recommendations based on your family, and align it with your coverage.
FAQs: Per Stirpes vs. Per Capita
Which is better, per stirpes or per capita?
Neither is automatically better—it depends on whether you want a deceased child’s children to inherit. Per stirpes protects that branch, per capita does not.
Can I use both methods in one policy?
Yes, you can name primary beneficiaries per capita and contingent beneficiaries per stirpes, or assign exact percentages alongside either method.
What if a beneficiary is a minor?
Insurance carriers can’t pay proceeds directly to a minor. Use a custodian, UTMA/UGMA, or a trust. Pairing this with life insurance designed for parents (like coverage for parents with young children) ensures funds flow smoothly.
Does per stirpes include stepchildren?
Not automatically. Stepchildren must be legally adopted or explicitly named to be included.
How often should I review my designations?
At least annually, and after major life events like marriages, births, or divorces. Even if your coverage amount is stable, designations can age quickly.
