Contingent Beneficiary

What Does Contingent Beneficiary Mean?

A contingent beneficiary is a party entitled to receive the proceeds or benefits of a life insurance policy if the primary beneficiary passes away before the insured. To be legally entitled to these rights, the contingent beneficiary must be designated by the insured in the insurance contract.

Insuranceopedia Explains Contingent Beneficiary

Naming a contingent beneficiary is advantageous because, under the Uniform Simultaneous Death Act, if a policyholder and beneficiary die within a short time of each other, it is presumed that the beneficiary died first. Consequently, if a contingent beneficiary has not been designated in the policy, the death benefit would go to the policyholder’s estate and be subject to division according to the terms of their will and any creditor claims.