The beneficiary is the the person who receives the proceeds of a life insurance policy when the insured dies.  There are many ways to designate beneficiaries of a life insurance policy.  This is one of the most overlooked areas when applying for life insurance.  For example, many people may want their proceeds to go to their spouse and ultimately their children when their spouse dies.  What happens if the insured dies and the spouse remarry’s and then dies?  The new spouse may be entitled to the entire estate and the children may not receive anything.  A good life insurance agent is worth his/her weight in gold when it comes to thinking about the possibilities and directing the most beneficial beneficiary designations for the client.

The general beneficiary designations are referred to as primary, secondary, and tertiary and refer to who get’s the proceeds upon death of the insured.  The tertiary beneficiary would be entitled to the death benefits if the primary and secondary beneficiaries are deceased at the time the insured dies, and the same principle applies to the secondary beneficiary if the primary beneficiary is deceased, and so on.

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