DEFINITION of 'Named Beneficiary'

This term refers to any beneficiary named in a will, a trust, an insurance policy, pension plan accounts, IRAs, or any other instrument, to whom benefits are paid. Named beneficiaries are the beneficial owners of the property and will share in the proceeds at the time of disposition. In an annuity policy, for example, the policyholder and the named beneficiary may be the same person.

BREAKING DOWN 'Named Beneficiary'

Beneficiary designations can be complex. For example, by naming a specific beneficiary in a life insurance policy, the proceeds of the insurance policy will not be subject to the will or to probate and will pass directly to the named beneficiary. There are many different kinds of beneficiaries, such as primary or contingent beneficiaries, and the named beneficiary need not be an individual. A named beneficiary of an insurance policy, for example, can be the estate of the deceased, in which case the actual beneficiaries will be designated in the will.

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RELATED FAQS
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    Learn what life insurance companies and retirement plan accounts require from you to change your contingent beneficiary designations. Read Answer >>
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    Understand how contingent beneficiaries are made aware of a policy payout, and learn what policy owners can do to ensure ... Read Answer >>
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