what is a contingent beneficiary? Meaning & Definition
Here we study, what is a contingent beneficiary? As well as its eligibility and Who Can be a contingent beneficiary? With the difference between primary and contingent beneficiary? And what does it mean to be a contingent beneficiary? So, now let us study the same.
What is a contingent beneficiary?
A contingent beneficiary is known to be a person who will receive the benefit of an insurance policy in case the actual beneficiary is not able to or dies. So, your life insurance death benefit will be received by the contingent beneficiary who will be the second person after the insurer or the primary insurer to receive the benefit.
Contingent Beneficiary Eligibility:
In order to be eligible for contingency beneficiary, an individual should be of legal age or have the lawful capacity for accepting the assets and should be elected by the primary beneficiary or the holder of a financial account. So, an individual should be of legal age.
Who Can be a contingent beneficiary?
Anyone can be included or nominated as a beneficiary contingent; therefore, it includes the following:
- Your spouse
- Other relatives
- Non-relatives
- An organization or charity
- A trust
- Your kids
What is the difference between primary and contingent beneficiary?
The primary beneficiary is normally your spouse or partner who will receive the benefit of insurance, although in case the partner or spouse is not able to receive the benefit of the same then arise the situation of a contingent beneficiary who will receive the insurance benefit in case spouse or partner is not able to. So, the contingent beneficiary will only receive the benefit when the primary beneficiary will not be able to do so.
What does it mean to be a contingent beneficiary?
A contingent beneficiary is a person who will receive the benefit of an insurance policy in case the actual beneficiary is not able to or dies. So, your life insurance death benefit will be received by the contingent beneficiary who will be the second person after the insurer or the primary insurer to receive the benefit.
Frequently Asked Questions
What is the difference between primary and contingent beneficiary?
The primary beneficiary is normally your spouse or partner who will receive the benefit of insurance, although in case the partner or spouse is not able to receive the benefit of the same then arise the situation of a contingent beneficiary who will receive the insurance benefit in case spouse or partner is not able to. So, the contingent beneficiary will only receive the benefit when the primary beneficiary will not be able to do so.
What does it mean to be a contingent beneficiary?
A contingent beneficiary is a person who will receive the benefit of an insurance policy in case the actual beneficiary is not able to or dies. So, your life insurance death benefit will be received by the contingent beneficiary who will be the second person after the insurer or the primary insurer to receive the benefit.
Do you need a contingent beneficiary?
You do need a contingent beneficiary as they can step in and inherit the assets in case the primary beneficiary is not able to. Otherwise, months or even years are involved with more paperwork involving probate court.
Who Can be a contingent beneficiary?
Anyone can be included or nominated as a beneficiary contingent; therefore, it includes the following:
- Your spouse
- Other relatives
- Non-relatives
- An organization or charity
- A trust
- Your kids
What happens if there is no contingent beneficiary?
In case if there is no contingent beneficiary then your assets go to the general estate and will also need to go through probate.