what is a beneficiary

A beneficiary is a person or entity who receives money or other benefits from a benefactor. In the context of life insurance policies, a beneficiary is the person or entity named in the policy to receive the death benefit. If no beneficiary is named, the death benefit will be paid to the insureds estate. It is important to keep beneficiary designations up to date as life circumstances change, such as marriage, children, or divorce. A life insurance policy should have both primary and contingent beneficiaries named, with the primary beneficiary receiving the death benefit if they can be found after the insureds death, and the contingent beneficiary receiving the death benefit if the primary beneficiary cannot be found. It is recommended to identify beneficiaries as clearly as possible and include their social security numbers to make it easier for the life insurance company to find them and reduce the likelihood of disputes arising regarding the death benefits. Besides life insurance policies, beneficiaries can also be named for other financial products, such as retirement accounts, brokerage accounts, bank accounts, and other assets. A beneficiary can be any person or organization named to receive the benefits of property owned by someone else.