What Does Beneficiary Mean?
A beneficiary, in the context of insurance, is any person or legal entity who is entitled to the benefits, proceeds, and/or earnings of a life or health insurance policy. They are often named or described with reasonable certainty in the contract of insurance. Beneficiaries of insurance policies can be classified into a primary and secondary or contingent beneficiary.
Insuranceopedia Explains Beneficiary
A beneficiary would receive the proceeds of a life insurance policy in case of the insured person’s death. In health insurance, the beneficiary would be entitled to receive covered health care services.
A primary beneficiary is the first party legally entitled to the benefits of the insurance policy. If the primary beneficiary dies before the benefactor, a contingent beneficiary, if named or described in the contract, will be the one legally entitled to receive such benefits.