What is a contingent beneficiary?

A contingent beneficiary gets your life insurance payout if your primary beneficiary can’t accept it.

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Amanda Shih

Amanda Shih

Editor & Licensed Life Insurance Expert

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

Edited byRebecca Shoenthal

Rebecca Shoenthal

Editor & Licensed Life Insurance Expert

Rebecca Shoenthal is a licensed life, disability, and health insurance expert and a former editor at Policygenius. Her insights about life insurance and finance have appeared in The Wall Street Journal, Fox Business, The Balance, HerMoney, SBLI, and John Hancock.

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Kristi Sullivan, CFP®

Kristi Sullivan, CFP®

Certified Financial Planner

Kristi Sullivan, CFP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, she was a regional consultant at Fidelity Investments for nine years.

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When you buy life insurance, you choose at least one person or organization — your primary beneficiary — to receive the policy’s death benefit when you die. A contingent beneficiary is the person who collects your insurance payout if none of your primary life insurance beneficiaries can accept the money. Naming at least one contingent or secondary beneficiary protects your insurance proceeds from entering a lengthy legal process or being taken by creditors.

Key takeaways

  • Without a contingent beneficiary, your insurance payout goes through probate and may be subject to estate taxes or debt collection.

  • Most people name a family member, but you could also name a charity or trust.

  • You can name multiple contingent beneficiaries.

Do you need a contingent beneficiary?

It’s a good idea to name a contingent beneficiary for your life insurance policy, just like you should have secondary beneficiaries for your will, trust, and retirement plans. Naming a contingent beneficiary ensures that your life insurance proceeds are paid out according to your wishes. 

If you don’t name a contingent beneficiary and your primary beneficiary is unable to claim the death benefit, a judge will decide where the money goes. This process can take months, and it means your loved ones might not get the financial support you intended for them.

→ Learn what happens if your beneficiary passes away before you

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Who should be your contingent beneficiary?

Pick a contingent beneficiary who depends on your financial support, or who will support your family when you die, like a family member or your child’s guardian. Your contingent beneficiary shouldn’t be the person who relies on your financial support the most — that person should be your primary beneficiary.

If you’re unsure who to name, a trust or charity are good alternatives. Avoid choosing a minor, since the insurer won’t pay out to anyone under your state's "age of majority" — 18 in every state except Alabama and Nebraska, where it’s 19, and Mississippi, where it’s 21. [1]

→ Learn more about choosing a life insurance beneficiary

How to name a contingent beneficiary 

You can name a contingent beneficiary the same way you name a primary beneficiary — by listing them in your life insurance policy. You’ll need to provide some basic details about each beneficiary, including:

  • Full name

  • Birthday

  • Contact information

You can name more than one contingent beneficiary and designate each to receive a percentage of your death benefit, just as you would with primary beneficiaries. Your policy may allow you to name people in other beneficiary tiers (tertiary, quaternary, and so on), but primary and contingent are enough for most people.

Review your beneficiaries regularly, especially after major life events, so you can correct contact information or change a beneficiary as needed.  

Ideally, your primary beneficiary would never die before you, but life insurance is about safeguarding your loved ones from worst-case scenarios. Designating a contingent beneficiary will potentially save your loved ones from going through a lengthy and complicated probate process while grieving.

Frequently asked questions

How does having a contingent beneficiary work?

A primary beneficiary receives the life insurance death benefit when you die. If your primary beneficiary can’t claim the death benefit, the money goes to your contingent beneficiary.

Who should be your contingent beneficiary?

You can name anyone who is not already a primary beneficiary on your policy as a contingent beneficiary. Many people name a relative or a trust.

What happens if there is no contingent beneficiary?

If you do not name a contingent beneficiary and all your primary beneficiaries die before you, then the death benefit goes to your estate and a judge decides who gets the money.

Do you need to have a contingent beneficiary?

You don’t need a contingent beneficiary, but having one is highly recommended. Having a contingent beneficiary ensures your policy is paid out according to your wishes.

References

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  1. National Conference of State Legislatures

    (NCSL). "

    Termination of Child Support

    ." Accessed December 01, 2021.

Author

Editor & Licensed Life Insurance Expert

Amanda Shih

Editor & Licensed Life Insurance Expert

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Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

Editor

Editor & Licensed Life Insurance Expert

Rebecca Shoenthal

Editor & Licensed Life Insurance Expert

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Rebecca Shoenthal is a licensed life, disability, and health insurance expert and a former editor at Policygenius. Her insights about life insurance and finance have appeared in The Wall Street Journal, Fox Business, The Balance, HerMoney, SBLI, and John Hancock.

Expert reviewer

Certified Financial Planner

Kristi Sullivan, CFP®

Certified Financial Planner

gray twitter icon linkgray linkedin icon link

Kristi Sullivan, CFP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, she was a regional consultant at Fidelity Investments for nine years.

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