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Life insurance pays death benefits to a beneficiary. The main beneficiary is the person who receives your death benefit. A contingent beneficiary is the one who receives the money when your primary beneficiary dies before you. This beneficiary is not necessary for a policy, but you should consider naming one.
The contingent beneficiary must be a person you know and trust to receive the benefits of the policy. You may be younger than the main beneficiary, but this is not an indispensable requirement. The contingent beneficiary should not expect to receive benefits. He is simply an endorsement for the main beneficiary in your policy.
Having a contingent beneficiary reduces the possibility of your life insurance policy paying a claim for your estate. The death benefits of life insurance policies. They are not subject to legitimation when you die, as long as you name a beneficiary. When there is not one, the policy pays the estate claim. If this happens, your policy will be unnecessarily subject to the costs of the probate court.
A contingent beneficiary acts as a “second in line” to your death benefit and does not receive the benefit if the primary beneficiary is alive. If you wish to divide the death benefit by more than one person, the contingent beneficiary option is not beneficial.
Consider appointing several primary beneficiaries if you want to distribute your death benefit between two or more people. Name the beneficiaries and specify the percentages you wish to grant to each beneficiary. When you die, the beneficiaries will receive the benefit of your policy according to your will.