Arnold, Bruce & Doerfler Insurance Blog
During life insurance applications, you will be asked to name your contingencies, and it would not be appropriate to name them if you do not know what those are. Fear not, it is not such an uncommon question among people, and this article aims to guide you through what a contingent beneficiary is and its purpose.
What Is A Beneficiary?
Before talking about a specific type of beneficiary, you should know what a beneficiary is. A life insurance beneficiary is someone who will take the grant from the policy when you die. Usually, the money taken is used for payments for financial needs such as funeral fees.
Multiple beneficiaries are allowed and common. They are usually given to their spouse and a parent for married people.
Differences Between A Primary Beneficiary and Contingent Beneficiary
As discussed above, a primary beneficiary is the one who is named to claim the benefits from the policy when you die. On the other hand, a contingent beneficiary is the emergency contact who will claim the payout from the policy when the primary beneficiary is unable to do so.
Why Take A Contingent Beneficiary
Guarantee and safety if anything unfortunate happens are helpful for you and your family. For example, if the primary beneficiary is also not alive when the claim is made could put everyone in a risky situation. A contingent beneficiary would straighten everything out, so it is a good failsafe to get one if anything happens.
Common Mistakes When Picking A Contingent Beneficiary
People often name their contingent beneficiaries as children, minors who need to have a custodian. Additionally, they name their custodians as their parents, which, in most cases, is the primary beneficiary. This is treating their primary beneficiary as their contingent beneficiary too, and would not work if the primary beneficiary is unavailable.
It is important to note that contingent beneficiaries are your emergency beneficiaries when your primary is unavailable. Additionally, double-check that your beneficiaries are not the same to prevent the very reason you took a contingent beneficiary.
At Arnold, Bruce, & Doerfler Insurance, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (503) 222-1951. Get your free quote today by CLICKING HERE. Any coverage discussed is not guaranteed. Contact us today to go over your specific needs and we are happy to help you find a policy that works for you and your budget!