What Does Contingent Beneficiary Mean in Life Insurance?

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  • Post last modified:November 15, 2019

Life insurance can be confusing as it has many terms and words used regularly. A layman would get confused about these acronyms and phrases.

So, it is better to understand the expressions before you move forward to purchase life insurance. If you are looking for life insurance, you must be familiar with beneficiaries – a person who receives all the benefits of the policy after your death.

It can be used by recipients to arrange final proceedings of the funeral or clear any debts on your behalf. But it has different types and one of them is contingent beneficiaries.  If you need to drill down a little more on it, we are here to help.

What is a Contingent Beneficiary?

Now, if we are explaining it, you may know about the primary beneficiaries. It is either your partner or a close family member who is chosen to receive all the policy benefits in case of your death. But, circumstances can change between the times and in that case, your primary beneficiary may not be able to receive insurance – here comes contingent beneficiary.

They are not from your close family members or a partner, but someone you can trust after your family. Many policies don’t require or make it compulsory to mention contingent beneficiary, but it advisable by the experts.

Why it is Important to Designate a Contingent Beneficiary?

Where there is life, there is death and most people will understand that circumstances can change quickly.

So, keeping in mind the unexpected events of life, we all want to be sure about the happening afterlife. People we are leaving money behind should get their right without any obstacle.

So, if a person has lost his/her partner and also a primary beneficiary, you have to name someone to receive the insurance after your death.

A person named John has mentioned his wife as a beneficiary but unfortunately lost her in a sudden accident or any other event of life; they have departed their ways for some reason. Now, the son and daughter can be his beneficiaries.

In another example, if a person has no children, they can either name a close member of the family or a friend. If your kids are not adults, the policy will remain with the guardian.

So, there are many more examples and circumstances that may demand you to add a contingent beneficiary. Therefore, you cannot ignore the need and importance of it.

What if all the Mentioned Scenarios Fail?

There is one odd possibility that you never had any close friends and family members throughout your life.

Now, what is the need for policy? You have a good chance to send all these funds to a charitable organization or even better, invest in some brilliant innovative idea that will last long.

People are doing it for so many different reasons. It can be as you played your part in building a nation. We are not always looking after our children, but sometimes, we can invest in a young enthusiast whose ideas are smart enough to change the world.

So, help someone grow; institutions are supporting such brilliant kids, you can send name them as your contingent beneficiary.

What is the Role of the Beneficiary in it?

Naming a partner is easy and most of the time, they are aware of it.

But in some cases, people restrain from letting their beneficiaries know which is wrong. Let them know and they can prepare for the basic steps of the process completion after your death. Make it easy for them and don’t make them starve for it.

The process can be as following:

  • Contacting the insurance policy provider. They can only contact if they know about the company and source of insurance.
  • Get the original copy of the death certificate and in case of the spouse, you will need a marriage counsel certificate too.
  • Complete the further paperwork which also includes showing your income source and tax payments, etc.
  • Get the approval of the claim.
  • Submit the claim and other necessary documents to the insurance company and you will receive the decided benefits.

The process is simple and easy. The only thing you need to know is about the company and further, you have the instructions to follow. In case of any confusion, companies are always there to help you get through the procedure.

Common Mistakes for Choosing a Contingent Beneficiary

You have all the scenarios. Everything is explained clearly, but you might still make some mistakes while choosing a beneficiary.

One thing to remember, you always get a chance to review your life insurance policies. It means you can change beneficiaries anytime you want.

  • So, you don’t have to feel stuck with the same beneficiary after divorce, death or any other occurrences of life. You can change it right at the moment you enter into a new phase of life. In case you forget to change, you are leaving your family members or friends with great legal trouble after your death.
  • Naming a minor as your beneficiary. If your kids are under 18, they might not be able to claim the policy at this age. So, you need to suggest a custodian for that period until they turn adults legally. Now, people make the mistake of holding spouses or primary beneficiary as the custodian – which can also result in many problems.
  • If you are having a problem with the decision, do not skip naming the contingent beneficiary. Consult the experts, and they will always advise you better.


Hopefully, the article was a great help in knowing about the beneficiaries, particularly contingent. So, in case you are still wondering about it, you can talk to the life insurance experts.

Moreover, this is not something too difficult to understand. Naming can be a hard decision, but again it is for your family’s sake. And when the family is the main concern, nothing is difficult to understand, not even contingent beneficiary in life insurance.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.