The designated individual that gets paid a death benefit when someone dies. Also defined as: The party or parties declared by a life insurance policy owner (A policy may have one or more beneficiaries) to receive the proceeds (net death benefit) of the life insurance policy after the insured’s death.
- An individual(s), corporation, or trust are typical examples. Name associations:
- Primary¾first to receive benefits,
- Contingent¾named to receive a gift under the terms of an insurance policy; the benefactor only receives the gift under particular circumstances,
- Tertiary ¾only receives proceeds if both the primary and secondary beneficiaries are deceased at the time the policy pays out,
- Revocable¾a beneficiary the policyholder has the right to remove or replace, and
- irrevocable¾the recipient must agree to any changes in rights to compensation from these entities.
- There can be different levels of the beneficiary designated for a policy. These levels include:
- Primary,
- Secondary, or
- Tertiary
The above are contingent beneficiaries in case of death of the recipient.
