@zakk Most life insurance policies, allow the beneficiary to choose from various number of payout options.
Like the others have said, if you want to determine how it’s paid out, you set up a trust that outlines exactly how you want the monies distributed in handled and assign a trustee to carry out your wishes based on the trust documents. Meaning the trust documents where you outline your wishes. Then you name the trust as the primary beneficiary. Fairly simple to do.
My guidance usually is, to name a trustee that you trust, in the trust documents, give them very broad authority to do what is appropriate, and then explain to them your wishes and goals. That allows them the maximum flexibility to do what is needed if something were to happen. In other words, you’re trusting them to carry out your wishes, but not legally binding them to do exactly what was laid out to the letter in your trust documents, if that doesn’t happen to be the most appropriate thing to do at the time of your passing. Hard to predict what things will be like in your life five, 10, 15 years from now.
If you’re doing this, because you have minor children, it’s a good idea to seek out an estate attorney, who can help you draft your wheel documents, as well as give you guidance on how to set up the trust documents.