What is a Primary Beneficiary?
A Primary Beneficiary is the first person or organization named in a life insurance policy to receive the policy’s death benefit when the insured person passes away. The policyholder designates the Primary Beneficiary during the application process or at any point while the policy is in force. This individual or entity has the first right to claim the insurance proceeds before any other beneficiaries.
If the Primary Beneficiary is alive and able to claim the benefit at the time of the insured’s death, they receive the full death benefit. However, if the Primary Beneficiary has predeceased the insured or cannot be located, the death benefit may then go to a Contingent or Secondary Beneficiary, if one has been designated.
It is essential for policyholders to periodically review and update the Primary Beneficiary designation to reflect any changes in life circumstances, such as marriage, divorce, or the birth of a child. This ensures that the death benefit is distributed according to the policyholder’s current wishes.
