Contingent Beneficiary: What rights does he have?

Submitted by Anonymous (not verified) on Tue, 03/31/2009 - 11:56

I’m interested to know how the position of the contingent beneficiary is described in a policy. What are the rights of contingent beneficiaries? If the contingent beneficiary is a minor, how the proceedings of the death benefits would get affected?

Posted: 31 Mar 2009 12:41 Post Subject:

The contingent beneficiary has no right, unless the primary beneficiary is dead before or at the same time as the policy holder.

Posted: 01 Apr 2009 10:59 Post Subject: insurance

( just putting my '2 cents in) On my Life Insurance policy I have a good friend of mine ( POA on other paperwork I have ) who is 'Primary' Beneficiary. My son and my parents are contingent beneficiaries. My 'Primary' lives pretty close to me. However..my parents live in another state.....so, I thought doing my Life Insurance this way was more practical.

Posted: 01 Apr 2009 11:39 Post Subject:

Hope you have reviewed your decision properly before naming your primary and contingent beneficiaries. As lori has mentioned the contingents beneficiaries have no right on the policy benefits until the primary beneficiary pre-deceased the policy holder or unidentifiable by the insurer.

The primary beneficiary would receive all the benefits of the policy and may decide not to share it with the other named beneficiaries of the plan.

~Jeremy

Posted: 01 Apr 2009 12:25 Post Subject:

Hi Texas-ranger

A contingent or secondary beneficiary has no right to receive any proceeds from a policy unless the primary beneficiary is also deceased at the same time as the policyholder. A contingent beneficiary may receive portion of the benefits received by the primary beneficiary only if the primary beneficiary wants to share the proceeds or in case the proceeds are declined by the primary beneficiary. So it seems that a contingent beneficiary has little or no right in a policy.

Posted: 01 Apr 2009 01:10 Post Subject:

Hi Lori,

It really sounds interesting :)

The contingent beneficary has no right, unless the primary beneficary is dead before or at the same time as the policy holder.



What would happen if the primary beneficiary dies soon after the policy holder passes away. Can't the contingent beneficiary claim for the benefits now?

A contingent beneficiary may receive portion of the benefits received by the primary beneficiary only if the primary beneficiary wants to share the proceeds or in case the proceeds are declined by the primary beneficiary.



Would the primary beneficiary be able to share the proceeds to any proportion he chooses?

Crossbreed

Posted: 01 Apr 2009 08:41 Post Subject:

Would the primary beneficiary be able to share the proceeds to any proportion he chooses?

yes, as it would be purely a 'gift'..

What would happen if the primary beneficiary dies soon after the policy holder passes away. Can't the contingent beneficiary claim for the benefits now?

Doubt it I think the money would go to the estate of the primary beneficary..however it would make for interesting 'lawyering'.. :wink:

Posted: 02 Apr 2009 07:18 Post Subject:

Would the primary beneficiary be able to share the proceeds to any proportion he chooses?



yes, as it would be purely a 'gift'..



Would this gift be tax free then?

And, I'd also like to know, if its worth keeping contingent beneficiary in the policy since he has no right on the policy proceedings. What if I want the benefits to go to both the parties named in my policy?

Posted: 02 Apr 2009 02:53 Post Subject:

For the most part, life insurance proceeds are tax free. That is, if it's paid by the insurance company to the beneficiary. If the beneficiary decides to gift those proceeds to someone else then that has nothing to do with insurance proceeds.
If you want the proceeds to go to both parties then make them both a primary beneficiary with a split with whatever percentages you want, like a 50%/50% split or you can even do a 70%/30% split if you want. If one of them dies before the insured, then it would revert to 100% on the survivor. Hope this helps.

Posted: 02 Apr 2009 08:12 Post Subject: insurance

I'm now starting a 401(K) through my employment. I have a name for the 'Primary' and my 'Secondary/Contingent' is my son. However.....right now my son is under 18. Would it be a good idea to add someone else, PLUS my son, to the 'Secondary', since he is a Minor right now?

Posted: 03 Apr 2009 05:28 Post Subject:

How long its SD before he would turn 18? You may appoint someone you trust as the guardian of the boy or may check out if the authority would take up the fiduciary responsibility. You may also decide to set-up a revocable living trust in order to avoid the process naming guardian.

The 401(K) would be available to the beneficiary either in monthly installments or in lumpsum. But this proceeding would be taxable.

Thanks,
Rupert

Posted: 04 Apr 2009 11:13 Post Subject: insurance

How long its SD before he would turn 18?

My son turns 18, January of 2010. God Forbid something happens to me and my 'Primary', his Guardian would be my son's dad :cry: . I SURE don't want to put my EX on my Life Insurance...that's for sure. RUPERT.....you said something about setting up a Trust INSTEAD of putting down a 'Secondary'.....how do I do this?

Posted: 05 Apr 2009 01:05 Post Subject:

Sd I was reading through the posts and was thinking that maybe you should split the primary beneficiaries. You can then include your friend, your son and your parents. I have seen people, even family, becoming very gredy when money is concerned. EVEN the ones you do not think would. How many times have we answered questions on here concerning people fighting for their share of money? Alot. You may save eeryone the tim and aggravation by just splitting up the money. This will insure your boy will get something. Just a thought. I know how important your son is to you.

Posted: 05 Apr 2009 01:30 Post Subject:

When amount is really a remarkably large then it is advisable to set up a trust. because trust has trustee all the time even if somebody resigns or somebody passes away.

But when it comes to the beneficiary then it is really difficult to make right decision. There are several examples that the insured person, first beneficiary and the second beneficiary died in a single accident so in this case it is really a difficult situation and one can not assure that the benefits of the money is actually handed over to the concerned person.

But when the trust comes into the picture it has several number of trustees and they take care that the beneficiary gets the benefits of the policy.It is really very rare that all the trustees are no more due to some accident. :wink:

Posted: 05 Apr 2009 07:34 Post Subject:

just putting my '2 cents in) On my Life Insurance policy I have a good friend of mine ( POA on other paperwork I have ) who is 'Primary' Beneficiary. My son and my parents are contingent beneficiaries. My 'Primary' lives pretty close to me. However..my parents live in another state.....so, I thought doing my Life Insurance this way was more practical.

Your friend gets everything. Your parents and son get nothing. Is that what you want to do?

Posted: 05 Apr 2009 07:38 Post Subject:

"What would happen if the primary beneficiary dies soon after the policy holder passes away. Can't the contingent beneficiary claim for the benefits now?"

The contingent would not get a thing. All of the money will belong to the primary beneficiary.

Posted: 23 Apr 2009 06:37 Post Subject:

What if the primary beneficiary dies like 1 month after the money has been paid to them and before they can spend it, do the contingent beneficiries have a right to the money especially if the contingents were children of the primary?

Posted: 23 Apr 2009 09:39 Post Subject:

No. The contingent would still not get a thing. 1 day. 1 month. 1 year. 10 years. None of it matters. If the primary beneficiary dies after the insured, the primary beneficiary gets everything. This is true even if the primary beneficiary dies before the death claim is paid.

Posted: 23 Apr 2009 10:03 Post Subject:

Once the death benefit is paid to the primary beneficiary the contingent beneficiary status would get void. The money would then get attached to the estate of the primary beneficiary if (s)he dies soon after receiving it. The contingent beneficiaries wouldn't receive the policy proceedings.

The contingent beneficiary status is viable only if the primary beneficiary pre-decease the policy holder.

Thanks,
Rupert

Posted: 23 Apr 2009 12:12 Post Subject:

The contingent beneficiary would be waived before this point.

Ex. Insured dies today. Primary beneficiary dies tomorrow. 6 months from now, the contingent beneficiary files a death claim. The contingent will get nothing. 100% of the money would get paid to the family of the primary beneficiary.

All that matters is who is alive at time of death.

Posted: 25 Apr 2009 05:50 Post Subject:

Oh okay thanks.

Posted: 05 Oct 2009 07:54 Post Subject: Life Insurance policy

If both the primary and the contingent beneficiaries are deceased, (the contingent person passing first) will the policy holder's estate receive the proceeds? Thanks.

Posted: 07 Oct 2009 07:27 Post Subject:

The answer is maybe. The policy may have default language for this situation. For instance, in some policies, it would go to the policy owner. The owner and the insured don't have to be the same person.

Posted: 08 Oct 2009 05:55 Post Subject:

Yes, I guess it goes to the estate. It would then be up to the estate executor to decide who should get it and what would be the right time to get the money dispersed.

Posted: 26 Jan 2010 07:12 Post Subject: Life Insurance

What if more than one beneficiary is named at the initial start of the policy. If the carrier dies, do all three get equal shares? And does status of who you were in relation to the policy holder (i.e. Wife as opposed to children). How does this work?

Posted: 26 Jan 2010 07:17 Post Subject:

Is there anyone here to answer this question, please?

Posted: 26 Jan 2010 07:37 Post Subject:

Lori2, your use of language is making it difficult to decipher your question. By "carrier", do you mean "insured"? The primary beneficiaries will receive money based upon how they are listed in the application or any subsequent changes. They may get equal shares. They may get unequal shares. Relationship doesn't matter.

Posted: 27 Jan 2010 02:01 Post Subject:

Relationship to the owner does not dictate how benefits are paid. It will depend on how the owner of the contract planned out benefits to be paid. The insurance company will pay according to that directive.

Posted: 27 Jan 2010 05:51 Post Subject:

Keep in mind State by State rules.

Posted: 25 Feb 2010 01:19 Post Subject: primary beneficiary

My father passed away in 2005, four years after he died I saw a letter my mother had that said primary beneficiary in bold letters and my name was under primary beneficiary, I asked my mother to let me see it in full but she did not let me see it, how do or where can I go to find out for sure.

Posted: 26 Feb 2010 01:13 Post Subject:

My goodness, how long does it take to answer the above question.

Posted: 27 Feb 2010 07:39 Post Subject: Finding out beneficiary

You can contact your father's executor who created his will. He will notify if you have been listed as the primary beneficiary on the life insurance policy. If you are unsure of the executive's identity, you can check with the probate court that executed the will. You can also contact the life insurance company, but you''ll be required to submit some documents to proof your identity before they provide you with any information.

Posted: 27 Feb 2010 01:48 Post Subject:

You Father died four years ago, you saw this paper a year ago..why are you now bringing this up? Whatever insurance that was going to pay has already paid, would be my bet. Were your parents married when your dad passed? Were you a minor when your Dad passed?
What was mom's reason for you not being able to examine this better? I don't get how she 'wouldn't' let you see it, I'd have probably jerked it out of her hand..but then that's me :lol: If the policy had you as a primary beneficary, unless your Dad had a change and you didn't see those papers, someone would've had to forge something to change it.. (ie you removing yourself as primary)...can't you do some 'snooping' when Mom's not home?

You are going to need to know the company, and then contact them...

My goodness, how long does it take to answer the above question.

Ease up there honey, you're a little impatient there, most of us have real jobs too :wink: and after all this was free :wink:

Posted: 05 Mar 2010 09:55 Post Subject:

Right now I have my parents listed as my primary beneficiaries split 50-50 and then my siblings as the contingent benefits split evenly. What if one of my parents passes away before or at the same time I do and I haven't updated my beneficiaries? Would the whole 100% go to the surviving parent? Or would the surviving parent still just get the 50% and then my siblings would get the other 50% split evenly between them since they are the contingent beneficiaries? Thank you!

Posted: 28 Jun 2010 05:16 Post Subject: Cintigency Beneficiary Calim Time

How long does the contingent beneficiary have to claim the proceedsafter the death of the insured.
Test question answers: 5, 20, 30 40 years?

Wikipedia answer - indefinitely or until the beneficiary was found.

Which is correct?

Posted: 29 Jun 2010 04:03 Post Subject:

What state license exam are we discussing?

First, a contingent beneficiary has NO CLAIM to death benefit proceeds if there was a surviving primary beneficiary at the time of the insured's death.

It is possible that some states might have a restriction on any beneficiary's application for a death claim. If that's the case, I would think 5 years would be the best answer. But normally, an insurer will honor the claim whenever it is presented.

So help us out here, and tell us what state's laws you are asking about.

Posted: 06 Jan 2011 05:22 Post Subject: beneficiaries

I have listed my husband as primary and my parents as secondary. In case of primary passing at the same time my Parents would be in charge of my children and that seemed the logical thing for me since my children are still 13 & 15.
My concern is why can't I list my spouse on my life insurance policy and my 401k?

Posted: 06 Jan 2011 06:00 Post Subject:

1) If you name your parents as contingent beneficiary and you and your husband die, the money belongs to your parents and not to your children. An attorney would probably advise you not to do it that way and instead have the contingent beneficiary be a trust under your will for the benefit of your children.

2)Your spouse can be the beneficiary of your life insurance and your 401(k).

Posted: 07 Jan 2011 10:40 Post Subject:

An attorney would probably advise you not to do it that way.



So would a highly ethical insurance agent! But it would be best not to name the trust as contingent beneficiary, and instead name the trust the primary beneficiary. Then you would use the trust document to describe how the proceeds are payable. There would be no need for a will to describe this.

As for the 401(k) plan, under federal law, your spouse MUST BE your beneficiary unless he signs off and allows someone (or something) else. If you were setting up a life insurance trust to receive those proceeds, you could potentially set up another trust to receive the 401(k) plan assets. You would need to speak with a tax adviser about the feasibility of doing that.

Posted: 07 Apr 2011 05:25 Post Subject: contingent

I am the contingent on my dads policy that he had thru some job he worked for. His primary benificary can not be found for the last two years now they are contacting me so I can help them find her(primary B). when will i have right to anything?

Posted: 09 Apr 2011 04:20 Post Subject:

As contingent beneficiary, you only have an entitlement to the proceeds if the primary beneficiary has predeceased the insured or is legally disqualified from receiving the proceeds (as in having murdered the insured, for example).

If the primary was alive at the time of the insured's death, but has since died, the money is still payable to the primary's estate.

Posted: 26 Jun 2011 12:06 Post Subject: Life Insurance

my mother listed myself and my brother as primnary beneficiaries on her life insurance policy.She passed away 2 months ago and although I have the original copiy of the policy and informed the insurance company of that, and I filled out akll the paperwork, they just issued my brother a check for the entire amount, and told me he promised to distribute the money.she split 20,ooo dollars between myself and other siblings and kept the rest for herself. Is htere anything I can do?

Posted: 27 Jun 2011 08:02 Post Subject:

they just issued my brother a check for the entire amount, and told me he promised to distribute the money.she split 20,ooo dollars between myself and other siblings and kept the rest for herself. Is htere anything I can do?



You can tell the truth, that your brother was the sole beneficiary.

No insurance company pays money to one person who "promises" to do anything with the money. When they wrote the check to your brother, it was because there was no other beneficiary listed.

she split 20,ooo dollars between myself and other siblings and kept the rest for herself.



Who is "she"? Your mother or your brother? This statement makes absolutely no sense. Your mother cannot split the money and keep the rest for herself -- she's dead. Your brother probably is not a she. And your opening statement was that your mother listed you and your brother as primary beneficiaries. There would be no "splitting" of the death benefit with anyone else unless all were named as primary beneficiaries.

When you have your story straight, we'll be happy to take another look at it.

Posted: 28 Sep 2011 10:25 Post Subject: primary beneficiary on life policy rights

my wife was named the primary beneficiary by her friend who also left her sons and daughter (heirs) as the primary beneficiary on another policy. My wife had loaned her friend money to buy a home and is still owed part of the money. We assume, her friend left her money to cover her loan if she died. The value of the policy exceeds what my wife is owed and the heirs think they should get the proceeds from the policy left to my wife in addition to the money that my wife's friend left them. This is California and the insurance company is trying to get my wife to back off her claimm but if she is the beneficiary to this policy, isn't she entitled to all of it?

Posted: 29 Sep 2011 01:48 Post Subject:

This is California and the insurance company is trying to get my wife to back off her claimm but if she is the beneficiary to this policy, isn't she entitled to all of it?


You are correct. The policy proceeds go to the primary beneficiary unless that person is legally disqualified, which your wife most likely is not.

If the insurance was to cover a specific debt, rather than naming your wife the beneficiary, your wife should have been given a "Collateral Assignment" of her interest in the policy as secured by the debt owed.

If an agent was involved, he/she should have counseled the policyowner to name someone other than your wife as the beneficiary. That way the excess proceeds would go to the primary beneficiary. If the debt was paid off prior to the death of the insured, then your wife would have executed a "Release of Collateral Assignment", and the primary beneficiary would be in position to receive 100% of the proceeds following the insured's death.

But since that did not happen, 100% of the proceeds are payable to the primary beneficiary. If that's your wife, no one can interfere with the transfer of the money from the insurance company to her . . . including the insurance company.

You can contact the CA Dept of Insurance for assistance with this if you'd like: http://www.insurance.ca.gov/contact-us/0200-file-complaint/

Posted: 14 Nov 2011 11:19 Post Subject:

What if the primary beneficiary cannot be located (has not been heard from for 24 years) but the contingent beneficiary are located, is it possible for them to have the benefits or does the primary beneficiary have to be found or deceased before the policy can be released?

Posted: 15 Nov 2011 03:34 Post Subject:

START A NEW THREAD TO GET ANSWERED BY AN INSURANCE EXPERT.

I think the primary beneficiary needs to be proven dead or legally disqualified to received the benefits, then only the contingent beneficiary can receive the payouts.

Posted: 17 Nov 2011 05:24 Post Subject:

Yes, unless it can be proved that the primary beneficiary has predeceased the insured, the money will eventually escheat to the state, which will hold it until it may be rightfully claimed.

Posted: 17 Nov 2011 05:51 Post Subject:

The contingent beneficiary actually works as a backup beneficiary. This is to make sure that when the something goes wrong with the primary beneficiary, the next person whom the insured wanted to have the benefits, does get it without it being shared by other people.

Posted: 17 Nov 2011 07:26 Post Subject:

when the something goes wrong with the primary beneficiary,


The most common "something" that affects the primary beneficiary is death. Criminal involvement in the death of the insured is another "something" that can occur. There are a couple of other legal disqualifications, but those are the top two.

Posted: 01 Sep 2012 05:00 Post Subject: Contingent beneficiary

My brother Dermot Quinn passed on 6/18/2012. He named my brother Steve as a beneficiary on a 3000.00 annuity. Steve had died in 2010. Dermot never changed the beneficiary form. Dermot died in Nevada. What are my rights as we are all family? Thanks

Add new comment

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.