Tertiary Beneficiary
What Does Tertiary Beneficiary Mean?
In life insurance, a tertiary beneficiary is the individual designated to receive the policy’s proceeds if the policyholder dies and both the primary and secondary beneficiaries are deceased at the time of the insured’s death.
Insuranceopedia Explains Tertiary Beneficiary
Being a tertiary beneficiary does not entitle the individual to a third of the proceeds. It simply places the person in line to receive the proceeds or assets if both the primary and secondary beneficiaries are no longer alive when the policyholder passes away. This is why most policyholders review the rules around naming beneficiaries when they set up or update a policy, so the payout order is clear if someone on the list dies before the insured. If either the primary or secondary beneficiary is still alive, the tertiary beneficiary’s entitlement is not activated. If the tertiary is the one who ends up inheriting, the process for how beneficiaries actually collect a life insurance payout is the same as it would be for a primary or secondary.
