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Difference between primary and contingent beneficiaries

Primary beneficiary is a person or organization that will receive payment from an insurance claim, regardless of any conditions. Contingent beneficiary is a person or organization that will receive the payment only if certain conditions are met. Thus, the main difference between the two is that primary beneficiary always receives the payment, while contingent beneficiary only receives the payment when certain conditions are met.
Difference between primary and contingent beneficiaries

Primary beneficiary

Primary beneficiary has the first right to receive insurance benefits. This means they will receive insurance settlement if the insurance policy terms are met.

Primary beneficiary may claim payment of insurance amount upon the policyholder’s death or upon the occurrence of other conditions provided in the policy.

Contingent beneficiary

Contingent beneficiary is entitled to receive insurance benefits only if certain conditions set forth in the policy are met. For example, this could be the policyholder’s death or the arrival of a certain date.

For instance, if a policyholder names their spouse as a primary beneficiary and their son as a contingent beneficiary with the provision that the son will receive the insurance proceeds only if the spouse dies before the policyholder, then the spouse has priority right to receive insurance benefits. If the spouse dies first, the son becomes the primary beneficiary.

It is essential to remember that details and terms may vary depending on the specific insurance policy and local laws.

Source: https://www.bankrate.com/insurance/life-insurance/contingent-beneficiaries/#how-to-choose-a-contingent-beneficiary

Photos are from open sources.

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