Contingencies

• Contingent beneficiaries matter because without them your life insurance policy may be pointless. For example, if your spouse is your primary beneficiary and the two of you die together in an accident, your insurance will pay no one unless you have a contingent beneficiary. That's why you should choose contingent beneficiaries by considering who you need or want to see taken care of. If you have children, for example, you may want them as contingent beneficiaries with friends or family members named as custodians. This ensures your life insurance will support your children.
  
  

Charity

• Sometimes people who have no contingent beneficiaries name a charity to receive their life insurance payout. Not only is this a thoughtful way to leave your insurance money, but under certain circumstances it can lead to a tax deduction during your lifetime. Consult an accountant about how naming charitable beneficiaries can provide tax relief.
  
  

Seek a Beneficiary

• Life insurance agents typically recommend you find as many contingent beneficiaries and further payees as possible if for no other reason than to see that your investment in life insurance pays off. Think about family members, friends and colleagues whose lives you might want to touch.
  
  

Do Nothing

• No harm comes from choosing not to name a contingent beneficiary. Hopefully, your primary beneficiary will be alive at the time of your death and all will work out as planned. If your primary beneficiary passes away before you and you have no other desired beneficiaries, consider canceling your policy and saving your money.