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What is a contingent beneficiary?

In the life insurance application process, you will be asked to name a contingent beneficiary. Here are a few things to consider when designating one.

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At some point during the life insurance application process, you will be asked to name primary and contingent beneficiaries. Naming beneficiaries can be a challenge if you don’t know exactly what you’re doing. Don’t worry, you’re not alone. A question that our customer success team gets asked a lot at this point is: “What exactly is a contingent beneficiary, and how does it differ from a primary beneficiary?”

When you buy a life insurance policy, it’s important to list both primary and contingent beneficiaries. To help with the estate planning process, we asked Haven Life’s customer success team to share their best insights with us on naming beneficiaries.

In this article:

What is a beneficiary?

A life insurance beneficiary is a person who will receive the payout from a policy if you were to die. The proceeds from the payout can be used to help pay for financial needs – those that come with death, such as funeral arrangements and other end-of-life expenses, along with day-to-day bills like the mortgage and child care.

You can name two (or more) people as the designated beneficiaries, outlining the percentage of the policy payout each would be given. You can also name a contingent beneficiary, who could receive the death benefit if something happened to the primary beneficiary. Think of a contingent beneficiary as your “alternate.” With most life insurance policies, you can change your beneficiary designation at any time.

For some, designating two primary beneficiaries — say, a surviving spouse or partner and a parent or close family member — may make sense, especially if they could face financial hardship. For others, one primary life insurance beneficiary, with a contingent beneficiary named, makes the most sense. The latter is what we commonly see at Haven Life.

You can have multiple primary beneficiaries and multiple contingent beneficiaries; you simply need to designate what percentage of your life insurance proceeds you want to allocate to each of your primary beneficiaries. Haven Life, for example, permits up to 10 primary beneficiaries and 10 contingent beneficiaries. No matter how many primary beneficiaries you have, the total percentage allocated must equal 100%. How you divide that 100% is up to you, the policyholder.

What is a contingent beneficiary versus a primary beneficiary?

Essentially, when setting up your life insurance policy, you’ll designate a primary beneficiary (typically your spouse or partner), who will receive all death benefits if you, well, die. (There’s no way to sugarcoat these things sometimes.)

Your contingent beneficiary would be your backup — this is the person who will receive those death benefits in the event that your primary beneficiary is unable to receive them.

Why should I designate a contingent beneficiary?

Life is full of unexpected outcomes. Selecting a contingent beneficiary is a prudent way to protect yourself and your loved ones from a number of “what-if scenarios,” such as your primary beneficiary not being alive at the time a claim is made.

Another reason you would want a contingent beneficiary listed is to avoid the death benefit proceeds becoming payable to the insured person’s estate should your primary beneficiary not be around, where it may be subject to estate taxes and a delay in disbursing money. (Note: If you’ve already set up a living trust and/or have a will established, this might not be an issue.)

How do I go about choosing a contingent beneficiary?

For many families, the choice is to designate a child or the person who would be the legal guardian of your children. If you don’t have children, consider a close family member or friend as the contingent beneficiary. If you would like to divide your benefits — for example, if you have multiple children — you can allocate a certain percentage of those life insurance proceeds to each person.

Oh, and in case you’re wondering: Yes, you can name a charitable organization as your chosen beneficiary.

What is a common mistake people make when picking a contingent beneficiary?

People often list children who are minors, in which case they also need to name a custodian. As surprising as it may be, the mistake some people make is naming a custodian who is also the primary beneficiary. This is not a suitable arrangement since the custodian would be deceased in order for this situation to come about in the first place.

How often should I review my beneficiaries?

People move. Relationships change. Life … happens. It’s a good idea to review your chosen beneficiary(s) at least once a year to make sure your beneficiary designation is up to date. Remember, you can always change, add or remove any named beneficiary. And if you don’t have a contingent beneficiary on your policy, consider adding one. You know what they say about peace of mind? You can never have too much of it.

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About Louis Wilson

Louis Wilson is a freelance writer whose work has appeared in a wide array of publications, both online and in print. He often writes about travel, sports, popular culture, men’s fashion and grooming, and more. He lives in Austin, Texas, where he has developed an unbridled passion for breakfast tacos, with his wife and two children.

Read more by Louis Wilson

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit:

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