Primary Beneficiary

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

The beneficiary is presumed to have predeceased the insured, so the proceeds pass as if the beneficiary died first. — The common disaster clause, often called the simultaneous death provision, addresses the situation where the insured and the primary beneficiary die in the same accident or under circumstances where the order of death is unknown. It presumes that the beneficiary died first, so the death benefit is paid to the contingent beneficiary or, if none, to the insured's estate. This avoids the proceeds being dragged through the beneficiary's estate and taxed twice, and it lets the policyowner's intended plan for distribution control who receives the money.

National insurance concept