Types of Life Insurance Beneficiaries

In the language of life insurance, a beneficiary is the recipient of the proceeds of a policy when the named insured dies. Life insurance beneficiaries are typically categorized as primary or contingent. A primary beneficiary is entitled to the proceeds of the policy upon the death of the insured, but such rights expire if he or she dies before the insured. A contingent (or secondary) beneficiary is entitled to the policy proceeds if the primary beneficiary has predeceased the insured.

A beneficiary can also be either specific (a person identified by name and relationship) or a class designation (a group of individuals such as the "children of the insured"). While the naming of specific beneficiaries is usually clear-cut, unintended complications can arise when designating classes of beneficiaries.

The owner of a life insurance policy has a great deal of flexibility in naming beneficiaries and can generally name anyone he or she chooses. When making beneficiary decisions, it is important to ensure that the wishes of the policy owner are fulfilled and that legal complications are avoided.

CRN200801-2012557

Exit Planning - 7 Questions

Exit Planning involves answering "Yes" to seven questions:

Do you know your exact retirement goals and what it will take - in cash - to reach them?
Do you know how much your business is worth today, in cash?
Do you know the best way to maximize the income stream generated by your ownership interest?
Do you know how to sell your business to a third party and pay the least possible taxes?
Do you know how to transfer your business to family members, co-owners, or employees while paying the least possible taxes and enjoying maximum financial security?
Do you have a continuity plan for your business if the unexpected happens to you?
Do you have a plan to secure financial independence for your family if the unexpected happens to you?

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Securities: Alaska, California, Colorado, Hawaii, Minnesota, Missouri, Oregon, Wyoming

Insurance: Alaska, California, Colorado, Hawaii, Minnesota, Missouri, Oregon, Washington

Unless otherwise identified, Associates on this website are registered representatives of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer and a registered investment advisor. Member SIPC. Insurance offered through Lincoln affiliates and other fine companies and state variations thereof. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Firm disclosure information available at www.LFG.com.

*Associated persons of Lincoln Financial Advisors Corp. who hold a JD and/or CPA license do not offer tax or legal advice on behalf of the firm.

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Stratton Turner LLCClear Solutions in a Complex World

Exit Planning - 7 Questions

Exit Planning involves answering "Yes" to seven questions:

Stratton Turner LLC
Clear Solutions in a Complex World