A Beneficiary is a person or parties that would receive proceeds in the event of the insured's death. It is best to be specific and up-to-date to avoid proceeds going to an estate where it can be tied up versus an immediate payout.
The types of Beneficiary are:
- Primary: In the event of the insured's death, all death benefits will be given first to the primary beneficiary or beneficiaries. When selecting multiple beneficiaries you will need to assign a weight between 0-100%. Be sure all together it adds up to 100%.
- Alternate/Contingent: In the event of the insured's death and no primary beneficiaries are alive to receive the benefit, then the benefit will go to contingent beneficiaries. Again, you can assign multiple beneficiaries with multiple weights.
It is recommended to name both Primary and Alternate beneficiaries to avoid death benefits going to an estate where it may be subject to estate taxes and a delay in disbursing money.