Host: Who should I make my beneficiary?
Bob Ley: A beneficiary is a person or entity named to receive all or a portion of the death benefit of a life insurance policy. The owner of the life insurance policy may name multiple beneficiaries and in most instances the policy owner can change or have new beneficiaries prior to the insurance debt. There are two types of beneficiaries primary and contingent. A primary beneficiary has the first claim to the proceeds of a life insurance policy should the insured die. There maybe more than one primary beneficiary and the proceeds do not have to be shared equally. The policy owner of the life insurance contract may also name a contingent or secondary beneficiary, the contingent beneficiary has claim to a portion of the death benefits only if the primary beneficiary is removed or dies prior to the death of the insured. There may also be more than one contingent beneficiary named. Many individuals designate a spouse as the primary beneficiary and the children as contingent beneficiaries. You should consult an estate planning attorney before making a minor child, a child under age 18, a beneficiary of life insurance policy. In addition, anyone contemplating making their estate the beneficiary of their insurance policy, should use extreme caution and consult with an estate planning attorney prior to doing so.