What Is Contingent Beneficiary? Definition

Why it matters

A contingent beneficiary protects your plan when life does not go as expected. For example, if your spouse is the primary and dies before you, your adult children as contingent beneficiaries can still receive the payout without a court process. Without one, the money may go to your estate, which can add delay and cost. Check each carrier's form, because rules for shares and minors differ.

Source: law.cornell.edu

Where we use this term

Fixed vs fixed index annuity: how do they work and who do they fit?

Related terms

Beneficiary: A beneficiary is the person or organization the policy owner names to receive the death benefit when the insured person dies. A policy can name one or several beneficiaries and can split the payout by percentage.
Primary Beneficiary: A primary beneficiary is the first person or group in line to receive the death benefit. If the primary beneficiary is alive when the insured dies, that person is paid ahead of any contingent beneficiary.
Death Benefit: A death benefit is the money a life insurance carrier pays to the beneficiary when the insured dies. It is usually paid as a lump sum and is generally income tax free to the beneficiary.
Probate: Probate is the court-supervised process of proving a will, paying debts, and passing a dead person's assets to heirs. Rules and time frames vary by state.
Estate: An estate is everything a person owns at death, including property, bank accounts, and investments, minus debts. It is handled under a will or state law.

All 241 terms

Why it matters

Where we use this term

Talk to a licensed agent.