What is a contingent beneficiary?

A contingent beneficiary receives the payout from your life insurance policy if your primary beneficiary can’t claim it.

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Amanda ShihEditor & Licensed Life Insurance ExpertAmanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.&Tory CrowleyAssociate Editor & Licensed Life Insurance AgentTory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

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Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.
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Kristi Sullivan, CFP®Kristi Sullivan, CFP®Certified Financial PlannerKristi Sullivan, CFP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, she was a regional consultant at Fidelity Investments for nine years.

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What is a contingent beneficiary?

When you set up a life insurance policy, you’ll name someone to receive the death benefit payout when you die. This person is called a primary beneficiary. Every policy needs to have at least one primary beneficiary. But you should also name a contingent beneficiary — this is the person who collects your insurance payout if none of your primary life insurance beneficiaries can accept the money.

Naming a contingent beneficiary can protect your insurance proceeds from entering a lengthy legal process in probate court or being taken by creditors.

What’s the difference between primary & contingent beneficiary?

  • The primary beneficiary is the main person designated to receive the payout from your life insurance policy upon your death. You can list more than one primary beneficiary and designate how much of the payout each one of them will receive, but you must name at least one person. 

  • The contingent beneficiary is the alternative person designated to receive the payout if none of the primary beneficiaries can receive it — either because they died, are unavailable, or refuse to accept the payout. 

If the primary beneficiary is available to receive the payout, the contingent beneficiary won’t receive any money.

Naming a contingent beneficiary isn’t mandatory, but you should consider naming one.

If you don’t name a contingent beneficiary and your primary beneficiary can’t claim the death benefit, a judge will decide where the money goes. This process can take months, and it means your loved ones might not get the financial support you left for them.

Naming a contingent beneficiary can ensure that the proceeds from your life insurance policy will go to the people you intended. 

→ Learn what happens if your beneficiary passes away before you

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Who should be your contingent beneficiary?

Who you choose as a contingent beneficiary will depend on your intentions for the money from your policy. If both you and your primary beneficiary are deceased, consider how you want the money to be used and the person who can best carry out those wishes. 

  • For example, let’s say you want the proceeds from your life insurance policy to go toward the care of your minor children. 

  • Most people name their spouse as their primary beneficiary. If both you and your spouse die, you’ll want to name a contingent beneficiary who will use the money as you intended. 

  • This could be your parent, sibling, or whoever would be your child’s legal guardian if both you and your spouse die. 

Avoid choosing minor children as beneficiaries, since the insurer won’t pay out to anyone under your state’s age of majority — 18 in every state except Alabama and Nebraska, where it’s 19, and Mississippi, where it’s 21. [1]

If you’re unsure who to name as a contingent beneficiary, a trust or a charity can be good alternatives.

→ Learn more about choosing a life insurance beneficiary

How to name a contingent beneficiary 

You can name a contingent beneficiary the same way you name a primary beneficiary — by listing them in your life insurance policy.

You’ll need to provide some basic details about each beneficiary, including:

  • Full name

  • Birthday

  • Relationship to you

  • Contact information

You can name more than one contingent beneficiary and designate each to receive a percentage of your death benefit, just as you would with primary beneficiaries.

Your policy may allow you to name people in other beneficiary tiers (tertiary, quaternary, and so on), but primary and contingent beneficiaries are enough for most people. 

You can also change your beneficiary any time. It’s good to review your beneficiaries regularly, especially after major life events or if your estate planning strategy evolves, so you can correct contact information or change a beneficiary as needed.

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The bottom line

Ideally, your primary beneficiary would never die before you, but life insurance is about safeguarding your loved ones from worst-case scenarios.

Designating a contingent beneficiary and keeping your beneficiaries up-to-date can save your loved ones from going through a lengthy and complicated probate process while grieving, and ensure your wishes are honored even after you’re gone. 

References

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Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of oureditorial standards.

  1. National Conference of State Legislatures

    (NCSL). "

    Termination of Child Support

    ." Accessed December 07, 2023.

Authors

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

Tory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Editor

Antonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Kristi Sullivan, CFP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, she was a regional consultant at Fidelity Investments for nine years.

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