Primary vs. contingent vs. tertiary beneficiary?

One of the most common mistakes people make when applying for life insurance is incorrectly stating who you want to make the beneficiary of your policy in case of your death.  A small mistake in this section of the application could cost someone you love a lot of money in legal battles or accidentally misdirected funds.

The primary beneficiary is the person(s) or legal document (such as a trust) that you want to be the first person paid in the event of your death.  You can designate 100% of the proceeds to be paid to one person, or split the proceeds into percentages for each person you want to leave the money to (such as a 50/50% split or 25/25/25/25%).  If the beneficiary is a trust, the trust should be a 100% beneficiary since the legal document will specify how the money is paid out.

The contingent or secondary beneficiary is the person(s) that you would want to be paid in the event that the primary beneficiary or beneficiaries become deceased before your own death.

A tertiary beneficiary is third in line – if both the primary and contingent beneficiaries pre-decease the insured, the tertiary beneficiary would become the primary.  Most applications do not ask for a tertiary beneficiary and you would need to request a form from the insurance company to designate one.

Note that it should be clearly stated on the application what the full name(s), date(s) of birth, and percentage of the death benefit are designated for each beneficiary.  Incorrectly completing this section could be very costly.  When you apply for coverage with our help, we make sure everything is completed correctly by walking you through the process.

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