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Should You Have a Contingent Life Insurance Beneficiary?

Should you have a contingent Life Insurance beneficiary?

By Byron Udell | January 31, 2017

So what’s your life insurance beneficiary back-up plan? Consider listing a Contingent Life Insurance Beneficiary on your policy. It’s the smart thing to do.

When you buy a life insurance policy, you must designate a beneficiary to receive your death benefit. The most common primary beneficiary is typically the spouse of the insured. So the wife is usually the primary beneficiary of the husband’s life insurance policy, and vice versa. But what if your beneficiary passes away before you do? Since none of us have a crystal ball, we never know when something unforeseen…such as that particular scenario…can occur. That’s why it’s a good idea to have a “Plan B” in place. Designating a contingent life insurance beneficiary can help insure that your death benefit doesn’t fall into a bureaucratic black hole (probate) or end up getting distributed to anyone other than what you would have wanted, and in the amounts you desired.

And in case you were wondering, you don’t have to designate just one person to be a primary or contingent beneficiary. You can assign multiple beneficiaries for each level, if you wish. It costs nothing extra to do so, and the addition of a contingent beneficiary (or beneficiaries) can be done any time…even after you’ve owned your policy for many years.

As stated earlier, the most commonly assigned beneficiary is the spouse of the insured. But other scenarios sometimes occur. Sometimes an ex-spouse can be listed as a beneficiary. It’s not uncommon for a judge in a divorce proceeding to require that life insurance is provided for the ex-spouse and the children. Sometimes the children themselves or a court-appointed legal guardian (if the children are underage in a particular state) are the designated beneficiaries. Sometimes parents of the insured are named as beneficiaries (this scenario can occur when the parents are dependent on the insured for financial support).

For over 30 years, AccuQuote has been helping people save big money on their life insurance. Our fierce independence means you’ll get the best values and most competitive life insurance quotes in the marketplace. We only represent the top-rated, brand-name insurance companies that you know and trust.

For more information on this topic, call AccuQuote at 800-442-9899.

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