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At Old Pueblo Insurance in Oro Valley, AZ, we value our clients and strive to help them find the best life insurance with understanding and confidence. One of the ways we can do this is by helping you understand terms that you may see on your policy paperwork. The terms we will discuss today are primary and contingent beneficiaries.
What is a beneficiary?
A beneficiary on a life insurance policy, will, trust, or retirement account is the person or entity (organization) you designate to receive benefits from the account upon your death. You can name more than one beneficiary on the policy to receive benefits. You would have to assign each recipient a specified percentage of the proceeds. For instance, if you have a $100,000 life insurance policy and divide the benefits evenly between your two children (50% each), each child would receive $50,000.
On many life insurance policies, you will see two types of beneficiaries: primary and contingent beneficiaries.
What are the differences between primary and contingent beneficiaries?
The primary beneficiary on your life insurance policy is the person you choose to be the first to receive the death benefits when you pass away. You can list multiple primary beneficiaries on a life insurance policy; you would stipulate how much each individual or entity would receive from the benefits. For example, you can leave 90% to a spouse and 10% to a religious organization upon your passing.
A contingent beneficiary is a replacement beneficiary who will receive benefits from the policy when the primary beneficiary cannot accept the benefits or is no longer alive at the time of your passing.
Questions or concerns? Contact us today!
If you are reviewing your life insurance policy and have questions about the terminology or have other concerns about death benefits, call Old Pueblo Insurance in Oro Valley, AZ, at (520) 742-0682.
