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If you name a minor child as a beneficiary of life insurance proceeds, the insurance company cannot pay money to the minor child. Depending on the state, the company would hold on to the money (at interest) until the child turns 18, or pay it to a court-appointed custodian or local bank (where it may be held at even lower interest). Where the amount of proceeds would be significant, it often makes sense to have a lawyer create a trust for the minor and have the proceeds payable to the trustee for use according to the terms of the trust.