What is the difference between a contingent and primary beneficiary?

Simply stated, a primary beneficiary is the first person entitled to receive the benefits, and a contingent beneficiary is next in line. As the name insinuates, primary beneficiaries have the first right to claim the benefits.

How would a contingent beneficiary receive?

A contingent beneficiary is specified by an insurance contract holder or retirement account owner as the person or entity receiving proceeds if the primary beneficiary is deceased, unable to be located, or refuses the inheritance at the time the proceeds are to be paid.

What is the difference between a secondary and contingent beneficiary?

A contingent beneficiary — sometimes called a secondary beneficiary — is the person or organization next in line to receive assets if your primary beneficiary isn’t able to. As with primary beneficiaries, you can name contingent beneficiaries in your will or trust, and also for assets that are able to skip probate.

What happens if a contingent beneficiary dies?

If a contingent beneficiary is named such as a child or other family member or friend of the deceased and the primary beneficiary cannot receive the proceeds, it will pass to the person next in line.

Can a child be a contingent beneficiary?

In summary, a minor child should most often not be named as the direct (contingent) beneficiary on life insurance, annuities, POD accounts, CDs, IRAs and similar assets that can otherwise pass outside of your Will and the probate process.

Who should be the contingent beneficiary on life insurance policy?

In insurance contracts, a contingent beneficiary is one who benefits when the prior beneficiary of the policy is unable receive the benefit. In Texas, if a beneficiary of a life insurance forfeits one’s interest in the policy, the contingent beneficiary named by the insured can receive the proceeds.