When it comes to life insurance, many people are not aware as to the various factors and aspects surrounding it and hence land up on a wrong insurance policy that does not fit their needs. In order to get the best out of an insurance coverage policy, it is absolutely necessary for one to check through each and every aspect with regard to life insurance and understand the nuances associated with it. There are plenty of things to look into and one of the most important aspects of all is to check and know the best term period to go with, the best insurance company that you can rely upon and checking and comparing different types of insurance policies. In this line, many people are not aware as to who a contingent beneficiary is and what the role of this type of beneficiary is when a primary beneficiary is already there.
Contingent and primary beneficiary
A contingent beneficiary is a person, trust or estate that would receive the assets of the concerned person who dies, if in case the primary beneficiary cannot receive the assets. In case you are opening up account of investment with regard to retirement plans, annuities, life insurance policies and other such schemes, it is necessary that you name a person who would receive the asset in your account or take ownership of the whole thing in case the person dies. In case one has more than one person in your mind, you can name them as primary beneficiary and mention the share that they will be receiving upon death of the person.
Naming of primary and contingent beneficiary
It needs to be understood that once a person dies, the assets would go directly through probate but the probate process could be avoided and the assets would go to the heirs if the primary and contingent beneficiaries are named on all of the person’s assets. It is to be noted that beneficiaries take precedence over that of a written will and the person has all the right to the assets once the owner is dead. In case of a married member, the primary beneficiary would usually be the spouse and they will receive the asset. If the children of the person or any other family member of the deceased person is named as a contingent beneficiary and the primary beneficiary cannot inherit the money then it would go to the contingent beneficiary.