Contingent (Secondary) Beneficiary

The primary beneficiary predeceases the insured or is otherwise unable to take the benefit — The contingent beneficiary is the backup: he or she receives the death proceeds only if the primary beneficiary dies before the insured, disclaims the benefit, or is otherwise disqualified at the insured's death. Naming a contingent beneficiary is important because it prevents the proceeds from falling into the insured's estate and going through probate if the primary cannot take. Multiple contingent beneficiaries may be named, and beneficiaries of the same class may share the proceeds by percentage. The contingent designation takes effect automatically according to the policy's order of priority.

National insurance concept

The first person entitled to receive the death proceeds if alive at the insured's death — The primary beneficiary is the person or entity first in line to receive the death proceeds when the insured dies, provided that beneficiary survives the insured. The owner selects the primary beneficiary and may change the designation if it is revocable. If the primary beneficiary dies before the insured or disclaims the benefit, the proceeds pass to the contingent beneficiary, if any, and otherwise to the insured's estate. Naming a primary beneficiary keeps the proceeds out of probate and directs them to the intended party, which is one of the main advantages of life insurance.

National insurance concept