Beneficiary

AAA

DEFINITION of 'Beneficiary'

Anybody who gains an advantage and/or profits from something. In the financial world, a beneficiary typically refers to someone who is eligible to receive distributions from a trust, will or life insurance policy. Beneficiaries are either named specifically in these documents or they have met the stipulations that make them eligible for whatever distribution is specified.

INVESTOPEDIA EXPLAINS 'Beneficiary'

Typically, any person or entity can be named as a beneficiary of a trust, will or life insurance policy and the one distributing the funds (the benefactor) can put various stipulations on the disbursement of funds (e.g. the beneficiary must have attained a certain age or be married). There can also be tax consequences to the beneficiary. For example, while the principal of most life insurance policies is not taxed, the accrued interest might be.

RELATED TERMS
  1. Beneficial Interest

    The right to receive benefits on assets held by another party. ...
  2. Custodial Agreement

    An arrangement whereby one holds an asset or property on behalf ...
  3. Bare Trust

    A basic trust in which the beneficiary has the absolute right ...
  4. Marital Trust

    A fiduciary relationship between a trustor and trustee for the ...
  5. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended ...
  6. Designated Beneficiary

    The person who determines how long the retirement plan will survive ...
Related Articles
  1. Designating A Trust As Retirement Beneficiary
    Retirement

    Designating A Trust As Retirement Beneficiary

  2. Keep Your Pet's Trust
    Insurance

    Keep Your Pet's Trust

  3. Can You Trust Your Trustee?
    Home & Auto

    Can You Trust Your Trustee?

  4. September 30: A Key Date For Retirement ...
    Taxes

    September 30: A Key Date For Retirement ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center