Who are secondary beneficiaries in a life insurance policy?

Secondary beneficiaries in a life insurance policy are individuals designated to receive the death benefit in the event that the primary beneficiary is no longer alive at the time of the insured's death. This ensures that the policyholder can have a clear succession plan for the distribution of benefits. By naming secondary beneficiaries, the policyholder ensures that their intended beneficiaries still receive the policy benefits, even if the first choice is unable to accept them. This serves as a contingency plan, providing peace of mind that loved ones will be supported financially, even under unforeseen circumstances.

This understanding highlights the importance of carefully selecting both primary and secondary beneficiaries during the policy setup to ensure the insured’s wishes are honored effectively.