What is a Contingent beneficiary in Life Insurance Plan

Ganesh
29.03.22 01:05 PM Comment(s)
insurance agency spring tx

As one of the biggest cities in the U.S., many residents of Spring, Texas rely on life insurance to provide for their families should something happen to them. What does it mean if you are named as the beneficiary? How does it differ from being listed as an owner or contingent beneficiary? Find out more about what a contingent beneficiary does in a life insurance plan and how to find an insurance agent in Spring, TX that can help you select your policy with confidence!

Till now you may heard of beneficiary while owning a life insurance so, perhaps you got confused with the new word "contingent beneficiary" right? It is good to have many beneficiaries when you plan to shop for life insurance. It ensures that your family well-being will be protected without any financial strain when you left them untimely.

The death benefits received after your demises helps in multiple way- paying mortgage loan, funeral cost, medical bills and grocery expenses. But what if your beneficiary is under age? According to Texas, a minor can't claim for the death benefit, in this scenario, your insurance policies might not consider as beneficial at the right time. This is where our contingent beneficiary comes in.

What exactly is a Contingent Beneficiary in Life Insurance?

When you get life insurance, you can set up beneficiaries. A contingent beneficiary is an extra person who gets your life insurance payout if someone else predeceases you. For example, you may name your spouse as beneficiary of your life insurance policy, but then name your sister as contingent beneficiary if something happens to your spouse before you. 

Likewise, if your primary beneficiary is minor, you will require another trustworthy person to claim on primary beneficiary behalf when you die, that person is known as contingent beneficiary. Contact our insurance company in Spring to know more about the life insurance beneficiaries.

What does a Contingent Beneficiary do in a Life Insurance Plan?

Once you purchase life insurance, you will likely fill out an application for coverage. At some point on that application, an option to add a contingent beneficiary may appear. You’ll be given two options: your spouse and another person. If you choose another person as your contingent beneficiary, he or she will receive your death benefit if your spouse dies before you do.

Contingent beneficiary can be anyone- your spouse, friend, business, and parent!

How to Name Your Beneficiaries

A contingent beneficiary allows you to have someone act as secondary level of security. This means that if you are married, your spouse will receive life insurance proceeds if he or she is unable to fulfill these duties; otherwise, another person (such as your child) can step in. You should also name someone who will be responsible for investing your policy’s cash value, such as an attorney or trust officer.

Make sure your contingent beneficiary fulfill all the required information such as full name, eligible age and social proof.

Contingent vs. Primary Beneficiaries

A key difference between primary and contingent beneficiaries is that if you choose a contingent beneficiary, your life insurance policy won’t get probate if your primary beneficiary dies before you. For example, if you name your spouse as your primary beneficiary and also designate your sister as contingent beneficiaries, then your sister will receive all of your payout when your spouse passes away.

Contingent beneficiary add a financial security that if the primary beneficiary can’t claim your insurance death benefits, atleast there is someone who can still take care of your family for all the expenses. So choose wisely. For more help, contact best term life insurance Company in Spring Texas today!

Life is complicated but your life insurance should not be! Having a secondary beneficiary ensure your family protection in case your primary beneficiary predeceases you! It gives peace of mind that if something happens to you and your primary beneficiary, atleast contingent beneficiary is there to claim death benefits to protect and cover your liabilities.

You may have heard of life insurance beneficiaries and are wondering, what exactly is a contingent beneficiary? In Texas, if you take out a term life insurance policy and name someone as your beneficiary, that person will receive your proceeds after you die. If you want to appoint another person to receive those funds instead should something happen to your named beneficiary before you pass away, then that person is known as your contingent beneficiary.

Talk to our professionals evaluate your current financial situation and know whether having a contingent beneficiary make sense or not?

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