Contingent Beneficiary is an appointed through an insurance contract beneficiary that will receive insurance benefits if primary beneficiary dies.
For example, a wife can name her husband a primary beneficiary and their children could be named as contingent beneficiaries. That would ensure that if something happens to both parents (e.g. a car accident while they both travel in the same car), the policy coverage will be paid out to their children.
Insurance Tip related to Contingent Beneficiary
One should consider appointing a trustee though if any beneficiary is a minor. The trustee should have solid financial situation, be in good health with a long life expectancy, and be a person you know well and trust.
Contingent Beneficiary: Expert Opinion
A contingent beneficiary on a life insurance policy is essentially like a secondary beneficiary. So you have a primary beneficiary on your policy, which is the person who would get the money if you passed away. If something happened to you and that primary beneficiary together, then the contingent beneficiary would get the money.
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An example might be a husband who names his wife as the primary beneficiary, and then his kids as the contingent beneficiaries. So if the husband and the wife were to pass away, the money would then go to the contingent beneficiaries.
Now keep in mind, if the contingent beneficiaries are minors, it’s a good idea to have a trustee.