A contingent beneficiary receives the death benefit if:

A contingent beneficiary is secondary and only receives the death benefit if the primary beneficiary cannot do so. This typically occurs if the primary beneficiary passes away before the insured individual. Essentially, the contingent beneficiary serves as a backup in the hierarchy of beneficiaries designated by the policyholder.

The other options involve scenarios that do not pertain to the contingent beneficiary's role. If the insured lives beyond the policy term, the coverage ends, and there will be no death benefit. Should the policy lapse, the benefits would likely be forfeited and not payable to any beneficiary. In the case of the insurer becoming insolvent, the situation would involve the insurance company's financial status rather than the beneficiary designations. Thus, the correct answer emphasizes the importance of the primary beneficiary's status in determining the contingent beneficiary's eligibility to receive the death benefit.