What Is Primary Beneficiary? Definition

Why it matters

Most people name a spouse as primary beneficiary. You can name more than one primary and set a share for each, such as 50 percent each for two children. If a primary beneficiary dies before the insured and no backup exists, the carrier follows the policy terms, which often means the estate is paid. State law and carrier rules differ, so check the policy wording.

Source: law.cornell.edu

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.
Contingent Beneficiary: A contingent beneficiary is a backup who receives the death benefit only if every primary beneficiary has died or cannot be paid. It is also called a secondary 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.
Policy Owner: A policy owner is the person or entity with the legal right to control a life insurance policy. The owner can change beneficiaries, take loans, surrender the policy, and name a new owner.

All 241 terms

Why it matters

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