Q: Do I Need To Name A Contingent Beneficiary?
Yes! If the beneficiary you have listed dies prior to the insured person, even if by only a few minutes, and no contingent beneficiary has been named, then the policy proceeds are paid to the insured’s estate. As previously mentioned this can cause significant tax liability… one that could be avoided by the designation of a contingent beneficiary. The naming of a contingent beneficiary does not affect the payment of the policy proceeds if the primary beneficiary is still alive. The contingent beneficiary has no rights to any policy proceeds unless the primary beneficiary has predeceased the insured person.