When you purchase a life insurance policy, you typically designate one or more primary beneficiaries who will receive the death benefit payout upon your passing. However, what happens if your primary beneficiary pass along with you? This is where contingent beneficiaries come into play.
A contingent beneficiary is someone who receives the death benefit payout if the primary beneficiary is unable to do so. In other words, they are the backup plan for your life insurance policy. By designating a contingent beneficiary, you can ensure that your life insurance proceeds will still go to someone you care about, even if your primary beneficiary is unable to receive the payout.
There are two types of contingent beneficiaries: primary and secondary. A primary contingent beneficiary is the first person who will receive the death benefit if the primary beneficiary cannot. A secondary contingent beneficiary is the next in line to receive the death benefit if both the primary beneficiary and the primary contingent beneficiary are unable to do so.
It is important to regularly review and update your beneficiary designations to ensure that they reflect your current wishes and circumstances. Life changes such as marriage, divorce, the birth of a child, or the death of a beneficiary can all impact your beneficiary designations.
In summary, a contingent beneficiary is a backup plan for your life insurance policy, ensuring that your death benefit payout will still go to someone you care about if your primary beneficiary is unable to receive it. By carefully considering your options and regularly reviewing your beneficiary designations, you can ensure that your life insurance policy provides the protection and support your loved ones need.
Looking forward for the opportunity to serve you and your family.
Ivonne Cabrera
Independent Life Insurance Broker
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