Who replaces the original beneficiary in case of death?

The contingent beneficiary is the individual or entity designated to receive the death benefit if the primary beneficiary is unable to do so, which may include situations such as the primary beneficiary predeceasing the insured. The purpose of having a contingent beneficiary is to ensure that the policy benefits are directed to someone specified by the policyholder rather than reverting to the estate or being left without a clear recipient.

In contrast, while the policy owner has control over the policy, including the ability to change beneficiaries, they do not automatically replace the original beneficiary in the case of death. The insured is the individual whose life is covered by the policy and does not assume the role of beneficiary unless specifically named. The insurer simply holds and administers the policy, disbursing benefits according to the terms set forth by the policy owner. Thus, the role of the contingent beneficiary is crucial when determining who will receive the policy benefits in the event of the death of the primary beneficiary.