Primary vs. Contingent Beneficiary: What’s the Difference?

Shawn Plummer

CEO, The Annuity Expert

Primary vs. secondary beneficiary? Primary vs. contingent beneficiary? Secondary vs. contingent beneficiary? What does this mean? This guide will cover the basics and differences between a primary beneficiary, a secondary beneficiary, and a contingent beneficiary.

This applies to life insurance, annuities, IRAs, and more.

What is a Primary Beneficiary?

The primary beneficiary is the person or entity with the first claim to inherit your assets after death. You can name as many primary beneficiaries as you want and designate how they will receive their share of the asset following your death if the death benefit equals 100% of the total assets.

What is a Contingent Beneficiary?

What happens if the primary beneficiary dies before the insured dies? A contingent beneficiary (also known as the secondary beneficiary) is the second in line to inherit your assets – if any, described in your will, retirement account, or annuity. If the primary beneficiary or beneficiaries die before the inheritance is claimed, the contingent beneficiary will inherit the death benefit.

For example, you name your spouse the designated primary beneficiary and the children the contingent beneficiary. If your spouse dies before you, the children will inherit the assets.

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Frequently Asked Questions

What is a primary beneficiary?

A primary beneficiary is a person or entity first in line to receive benefits from a policy, plan, or estate. The primary beneficiary has precedence over all other beneficiaries.

What is a contingent beneficiary?

A contingent beneficiary is a person or entity next in line to receive benefits from a policy, plan, or estate if the primary beneficiary dies or is otherwise unable to collect. The contingent beneficiary only receives benefits if the primary beneficiary cannot.

What are the rights of a beneficiary?

Beneficiaries have the right to information about the policy, plan, or estate they receive benefits. They also have the right to change their status as a beneficiary and waive their rights if they choose.

What does contingent mean by life insurance?

“Contingent” in the context of life insurance refers to a secondary or backup beneficiary named in a life insurance policy. A contingent beneficiary is only eligible to receive the death benefit if the primary or named beneficiary is not alive or unable to receive the death benefit for any other reason. Having a contingent beneficiary is essential to ensure that the death benefit will be received by someone in case the primary beneficiary cannot accept it. It bears noting that the grant of funds will only go to this secondary recipient if there is no other alternative for the principal one.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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