So, What’s a Contingent Beneficiary?
When you set up your life insurance policy, you will need to designate a beneficiary, but your policy will also require a contingent beneficiary. Are you familiar with that term?
Primary vs. Contingent Beneficiary
Life insurance is meant to protect your loved ones in case of your death. That’s why it’s so important to be clear about who your beneficiary will be. The primary beneficiary is the person or entity you designate to receive the cash benefit first in the event of your death. It can be anyone of your choice, from your spouse, child, or anyone else close to you, to a trust or non-profit organization. But what if your primary beneficiary dies? Who would receive the money then? The answer is simple: the contingent beneficiary.
Basically, the contingent beneficiary is next in line to get the death benefit or your insurance money. It is crucial that you designate both a primary and a contingent beneficiary because, if for any reason, the primary beneficiary is no longer on this earth when you die, the discussion of who gets the money goes from being very simple to very complicated.
Keep Your Policy Up to Date
The first step towards protecting your loved ones and their future is to get a life insurance policy. The next very important thing on the list is to take the time to review it periodically and make sure it has the most up-to-date information. Don’t let the idea of paperwork keep you from doing what’s important. Get in touch with your insurance agent to discuss policy updates.
At AAI Central Agency, we’re here to make things easy for you. We will guide and advise you so you can make the best choices for you and your loved ones. If you don’t already own a life insurance policy, give us a call, request a quote online, or stop by our office in Thornton, CO. We’ll be happy to answer all your questions.