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Naming A Beneficiary For Your Life Insurance Policy

You May Have Primary And Contingent Beneficiaries

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You can name beneficiaries one after the other. If something happens to one person, the next person becomes the beneficiary.

A "primary beneficiary" is the individual named to receive the proceeds of the life insurance policy upon your death.

A "contingent beneficiary" is the person who receives the proceeds upon your death if the primary beneficiary were to die at the same time as you or before you. 

For example, if you leave the proceeds of your life insurance "To Jane, but if Jane is not alive at the time of my death, to Sally", then Jane is the primary beneficiary and Sally is the contingent beneficiary.

You may even name a person who is contingent to the contingent beneficiary in the event that the primary and first contingent beneficiaries both predecease you.

If you are leaving the proceeds to an individual, it is always good idea to name a contingent beneficiary in case:

  • The primary beneficiary dies before you and you don't get around to changing the named beneficiary, or
  • The primary beneficiary dies at the same time as you -- say in the same auto accident.

If you don't name a contingent beneficiary, you can get into the question whether the money is supposed to go to the beneficiary's estate or to yours. Answering that question could involve a lengthy, expensive, battle in court.


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