Do I really need a backup beneficiary?

Question

Right now, my policy has a primary beneficiary, but I never paid much attention to the backup section. I am trying to figure out what happens if the primary beneficiary dies first or cannot receive the proceeds. I am getting different answers from different agents, so I want to separate guaranteed contract terms from sales projections.

Soradin · Accepted Answer

A backup can reduce delay and help keep the benefit aligned with your wishes after an unexpected death. When evaluating the policy, naming backups can prevent the proceeds from defaulting to the estate or another result set by the policy. When evaluating the policy, a contingent beneficiary receives the death benefit if no primary beneficiary can receive it. Beneficiary decisions work best when the insurer's form is checked against the rest of the estate plan, because the policy generally pays according to the designation on file.

Do I really need a backup beneficiary?

Soradin

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