Definition: The beneficiary, when related to insurance, is someone who receives the benefits of an insurance contract. This can refer to the person who receives the insurance proceeds from a life insurance policy or annuity. It also can refer to someone who receives benefits from a health insurance policy such as payments for a health care service.
The primary beneficiary is the person who first would receive the benefits of an insurance policy. If the primary beneficiary is deceased then the contingent beneficiary would receive the proceeds of the insurance policy. A contingent beneficiary is also sometimes called a secondary beneficiary.
Also Known As: primary beneficiary, contingent beneficiary, secondary beneficiary
Examples: Jim and Tina have decided to buy a term life insurance policy to protect their family financially if they were not available to do so. If either Jim or Tina died, the surviving spouse would be the primary beneficiary. If both Jim and Tina became deceased their oldest child would receive the proceeds from the life insurance policy because their oldest child was chosen by Jim and Tina as the contingent or secondary beneficiary.
