Beneficiary
The person or entity designated to receive the proceeds or benefits from an insurance policy when a claim is paid, most commonly upon the death of the policyholder in life insurance.
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Example
“After getting married, I updated my life insurance policy to name my spouse as the primary beneficiary.”
Memory Tip
The beneficiary is the one who BENEFITS from the policy payout.
Why It Matters
Outdated beneficiary designations are one of the most common and costly mistakes in financial planning.
Common Misconception
Many people think their will overrides their insurance beneficiary designation. It does not.
In Practice
Review your beneficiary designations after any major life event. Always name a contingent beneficiary.
Etymology
From Latin beneficiarius, meaning one who receives a benefit.
Common Misspellings
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