When will a contingent beneficiary receive death benefits from a life insurance policy?

A contingent beneficiary is designated to receive death benefits only in specific circumstances where the primary beneficiary cannot inherit the benefits. This occurs when the primary beneficiary dies before the insured. In this case, the death benefit is directed to the contingent beneficiary, as they are the next in line to receive the proceeds under the terms of the policy.

Incapacitation of the primary beneficiary does not necessarily trigger payout to the contingent beneficiary unless the primary beneficiary is also deceased. The triggering condition for the contingent beneficiary is clear: their entitlement arises only if the primary beneficiary is not alive at the time of the insured's death.

The notion that the death benefits would be paid immediately after the insured's death is misleading, as the distribution will depend on the status of the primary beneficiary. The benefits are also not connected to any action like issuing a replacement policy; rather, they are strictly contingent upon the circumstances of the primary beneficiary's status at the time of the insured's passing.