Corporate Finance Institute
By Tim Vipond
June 18th, 2020
A contingent beneficiary is the alternative beneficiary, designated by the account holder, who is set to receive the proceeds or benefits of a financial account only if the primary beneficiary is not able to accept the benefits at the time of payment. The financial account can be in the form of insurance, retirement, or an inheritance.
As an alternate recipient of financial proceeds, a contingent beneficiary has the right to enforce the provisions included in the contract.
If a person or third party who controls the account refuses to implement the agreement, then a lawsuit may be filed by the concerned parties. In extreme cases, the contingent beneficiary can have a reasonable claim.
A contingent beneficiary can receive insurance proceeds, an inheritance, or retirement assets when the primary beneficiary is deceased, missing, or refuses to claim them at the time the account becomes due.
