Types of Life Insurance Beneficiaries: Primary vs Contingent Beneficiary


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Whether you’re a wife or husband, or a mother or father, you have someone that’s important in your life.

It could be a spouse or it could be your children. It may be a friend or even a business partner. Either way, you love them and want to make sure that they’ll be taken care of in case anything happens to you.

Writing a will is an excellent way to ensure that your loved ones will be cared for once you pass. Having a life insurance policy will make sure your loved ones will be financially set due to a sudden passing. 

Whether you set your loved ones as a primary beneficiary or a contingent beneficiary on your policy, you’ll know that they’re well taken care of.

Life Insurance by the Numbers

Life insurance comes with a lot of questions. How much money should you get in your policy? Is it possible to have too much or too little in your policy?

It’s important to make sure that you’re getting the right kind of coverage. Choosing the wrong policy or not getting enough coverage can cause a lot of problems.

It isn’t uncommon for people to underestimate how much it would take to keep their family afloat if they were to pass.

It’s estimated that 70% of U.S. households with children under the age of 18 would have trouble meeting everyday living expenses within just a few months if a primary earner were to die.

It’s believed that there’s $15.3 trillion in unmet life insurance needs in the United States. If you want to care for your family you need to have the right policy, and you need to get it today.

Breaking Down Terms

Getting the right insurance doesn’t just mean getting a policy that will cover living costs. You also have to make sure that you’re setting up your spouse and your children to get what they need.

Before we break down the meaning of a primary beneficiary and a contingent beneficiary, let’s dive into what exactly a beneficiary is.

A beneficiary can be a person, trust, or entity that is designated by the policyholder to receive some form of money or assets after they die. Most people chose living people as their beneficiaries, but that doesn’t mean that it always has to be a person.

You could choose to leave money to a charity or cause you supported in life. Money could also go into a trust for future use.

Now that you know about beneficiaries, we can spend time on the two most common types: primary and a contingent beneficiary

If you were to designate someone as your primary beneficiary, they would be the first person to receive anything if you were to die.

Most married couples choose their spouse as their primary beneficiary. Some single parents may make their oldest child their beneficiary or could designate their child’s legal caretaker as their primary.

A contingent beneficiary would receive money or assets if the primary can’t. In the event of the primary’s death or a legal situation, the policy would go to the contingent beneficiary.

The process can get a bit more complicated depending on the involvement of trusts and whether or not there are conditions attached to the beneficiary’s status. But overall, the easiest way to view it is that the primary beneficiary has first claim on assets after death.

The Importance of a Contingent Beneficiary

Because a contingent beneficiary isn’t the first in line to receive assets upon death, some people simply name someone as their primary beneficiary and don’t bother to list a contingent beneficiary.

Not having a contingent beneficiary can lead to problems in the future in case problems occur with your primary.

Your spouse, children, and other loved ones could get involved in a lengthy legal battle over the policy. It could complicate estate hearings and put people’s financial futures at stake.

Having a contingent beneficiary helps ensure that your money and assets will go to the right places in the event of your passing.

How to Choose Your Beneficiaries

As you can see, it’s important to have a primary and secondary beneficiary on your policy. Having both is the easiest way to ensure that financial matters go smoothly after you pass.

Regardless of if you’re looking for a primary or contingent beneficiary, you have a tough decision to make. Who do you want to handle your money and the potential financial future of your loved ones if you were to die?

The answer to that question can be complicated.

We can’t tell you who would be the right pick, but we can give you some advice to make sure that you handle your life insurance policy in the best way possible.

Choose Someone That Can Manage Money

You may want to leave your everything to your spouse or business partner, but they may not be good with managing money.

Whoever you choose to name as your beneficiary should be responsible with money, especially if your money is going to be supporting a spouse or child. If you choose someone that can’t handle money, you’re putting people’s financial futures at stake.

If you’re concerned about their ability to manage money, you may want to consider having them talk to a financial planner. However, if you have any doubts about their ability to properly manage finances, you may want to choose someone that’s more responsible.

Don't Neglect Social Security or Disability

Does your potential beneficiary receive government benefits? Are you thinking of leaving money to a child that will need disability when they come of age?

If your beneficiary already receives social security or disability, you may want to consider appointing someone else. Inheriting a large sum of money could affect their payments.

Remember Age

Are you a single parent that wants to make sure that your children will be taken care of if you pass? If you want to make things simple for them, don’t name anyone under the age of 18 as your primary beneficiary.

After everything we’ve said it may seem strange to not name your child as your beneficiary. After all, you want to make sure that they’ll receive money, and caring for them is your main priority.

Life insurance companies legally can’t release the money to minors. In fact, depending on where you live your child may have to be 21 years old before they can hope to see any of your policy money.

If you pass without naming someone of the proper legal age to handle the money, the court will have to appoint a guardian for your child. This can be a long process which can be costly.

The easiest way to remedy this situation is to appoint someone to manage the policy on behalf of your child in the event of your passing.

Keep Your Will in Mind

A will is a legally binding agreement that can ensure that your assets and money will be divided up the way you want it to be. Even though a will is legally binding, it can’t undo the stipulations set in a life insurance policy.

If your will claims that your primary beneficiary is one person, but your life insurance names another, more likely than not the person named in the life insurance policy will get the money.

There have been many legal battles fought over wills and insurance policies. Don’t make your loved ones have to fight over your assets because of a simple oversight.

Make sure that your will and insurance policies have the correct people listed.

Keep Everything Updated

Since we just mentioned the importance of making sure your will and insurance policy have the right information, we should mention why you should always make sure your insurance policy is up to date.

Some people assume that when major life events happen that certain kinds of paperwork will be automatically updated. Marriages, re-marriages, and deaths can occur, but your policy won’t change unless you make moves to change it yourself.

This is especially important for people who may have recently gotten remarried, have adopted children, or have recently become legal guardians. As soon as you make a major life change, one of your first tasks should be calling your insurance company to make needed changes.

Remember That You Have Options

Sometimes there is no clear-cut answer on who should be the primary or contingent beneficiary.

You may have a considerable amount of money in your policy and you want to ensure that it’s properly managed. There could be family and personal conflicts that make you worry about how things will be handled if you pass.

If you’re stuck on who to name, the answer may be to make a trust. Having a trust or appointing a trustee can help ensure that your money is dispersed in the best way possible.

If a trust seems too complicated, there’s always the option of donating your money and assets to charity.


If you want to help your loved ones after you pass, having the right beneficiary is important. Don’t take the decision lightly. Consider the most pressing needs of your family if you were to pass, and plan around what you think is important.

If you need help with your life insurance policy or have questions about policies, please contact us so we can give you the information you need.

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Jeffrey Manola

Jeffrey Manola

Jeffrey Manola is an experienced life insurance agent and the founder of Top Quote Life Insurance. His mission when he created Top Quote Life Insurance was to provide online consumers searching for life insurance with the absolute best quotes for term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance.

Not only does he strive to provide you with the best rates for your life insurance coverage, but he also wants you to be well informed about the different types of life insurance options that are available. You will also find a significant amount of valuable information on the multiple life insurance companies that can provide you with coverage.

Jeffrey Manola is licensed to provide expert advice and help aid in the purchasing process of life insurance products. He is licensed with the National Insurance Producer Registry (NIPR) in the following states:

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Never hesitate to reach out to Jeffrey if you need help. Top Quote Life Insurance is more than just an online quoting agency. We want to help you save money, protect your future, and earn your trust (888) 777-7574.

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