Contingent Beneficiary
For life insurance, and other similar things, the contingent beneficiary represents a kind of backup. Like a second-string quarterback or relief pitcher.
You have your spouse listed as the beneficiary on your life insurance. But then both of you meet your demise simultaneously in a freak dishwasher explosion. What happens to your life insurance benefits?
Luckily, you specificed your children as your contingent beneficiaries. Since your primary beneficiary isn't available (due to the wet boom that took place in your kitchen), the insurance company moves to the contingent beneficiaries.
We've used life insurance as the example. But it can come up in any situation that includes a beneficiary. Pensions and other retirement accounts are common as well.
Related or Semi-related Video
Finance: What is Contingent Liability?4 Views
Finance allah shmoop what is contingent liability All right you
know what a liability is right It's a debt it's
a promise you've made that you need to fulfill teo
pay someone and fulfilling it can be done with cash
or ah promise of delivering inventory or after you've sold
the home to the joneses An interesting family with oddly
large foreheads you know delivering good title to the home
to them right So you're fulfilling liability of producing your
home so what's a contingent liability Well think of it
is a call option or a put option on a
security A contingent liability is a derivative of some other
underlying being like another liability Well the most common contingent
liability would be a filed lawsuit that is more than
just an ambulance chasing securities lawyer hoping to get a
quick five hundred grand to go away google might be
willing to pay three billion dollars toe by ring That
wireless doorbell company started by some weirdo contingent upon ring
properly defending its lawsuit from honeywell which claims that they
own the patents on the process while the financial outcome
of that lawsuit is a contingent liability to the company
Ring and the outcome of the joneses moving into town
well is a worldwide dominance and the enslavement of all
human I mean that's what's at stake their people But 00:01:31.39 --> [endTime] not least they keep their front lawn looking nice