Classes of beneficiary
MR. WATSON: You could name a "class" as a beneficiary. .Ex., I want all children born of the insured to be my beneficiary.. This is an example of a "class."
MR. WATSON: If all of y'all are my kids from prior marriages, when I die, y'all are getting ready to split up my money. Might not be a good thing. Ex. I die. Here comes Marina, born in another country, knocking on the door. You say, "Who the heck are you?"
MR. WATSON: She says, "I am your long lost sister." "Very nice to meet you."
MR. WATSON: Would she be entitled to any money?
WOMAN: Yeah. It says all your children, children of the insured.
MR. WATSON: Of course she would. Another example of "class", All children born of the insured and said wife. Now, it's only our offspring. Does that make sense?
ALL: Yes.
MR. WATSON: That's classes of beneficiary.
Types of Beneficiaries
Primary beneficiary
MR. WATSON: Can I have more than one primary beneficiary?
ALL: Yes.
MR. WATSON: Indeed. I want Lisa, my wife, and Marlin, my son, to be my primary beneficiary, to split equally. Can I do it?
ALL: Yes.
MR. WATSON: Oh, yes. What if I want Lisa to be my primary beneficiary, if living, otherwise, my three sons to get the benefit?
WOMAN: Yes.
MR. WATSON: Of course I can. The sons are secondary beneficiaries or contingent beneficiaries . So when I die, the insurance company is going to see if Lisa is living. If she's living she gets the money.
MR. WATSON: But if she's dead, it drops down to the secondary beneficiary, these three guys. They're known as contingent beneficiaries, which is any other than primary.
MR. WATSON: I want:
- my wife to be the primary beneficiary if living; otherwise,
- my three sons to be my secondary beneficiary if living;
- otherwise, the church. The church would be the tertiary beneficiary , the third in line. What's "tertiary" mean?
ALL: Third.
MR. WATSON: If no beneficiary is named when I die or if they're all dead when I die, it goes to my (policy owner) estate. Then, my estate will go through probate. Probate means to "prove" a "will." Got it?
ALL: Yeah.
