What is the role of a 'Contingent Beneficiary' in a life insurance policy?

Question: What is the role of a 'Contingent Beneficiary' in a life insurance policy?

Answer options:

• They share the benefit equally with the primary beneficiary.
• They receive the benefit only if the insured person dies in an accident.
• They are the person who pays the premiums if the owner cannot. ✅ They receive the benefit only if the primary beneficiary predeceases the insured.

Correct answer: They receive the benefit only if the primary beneficiary predeceases the insured.

Explanation: A 'Contingent Beneficiary' (or secondary beneficiary) receives the death benefit only if the primary beneficiary dies before the insured person.