Are beneficiaries always required to be named at the time of issuing a life insurance policy?

A life insurance policy does not always require a beneficiary to be named at the time of issuance due to the potential for a contingent beneficiary provision. This allows policyholders the flexibility to designate beneficiaries later while still obtaining the insurance coverage they need at the time of policy issuance.

For instance, a policy might be issued with the stipulation that if no primary beneficiary is named, the benefits will follow a predetermined order of succession, typically including contingent beneficiaries. This means that if the primary beneficiary passes away before the policyholder or is otherwise unable to claim, the contingent beneficiary would receive the death benefit.

In contrast, while it is common to name a primary beneficiary to ensure designated individuals receive policy benefits, there is no universal requirement mandating that this occurs immediately upon issuing the policy. This flexibility caters to varying personal circumstances and ensures that policy coverage can be initiated without delay or the necessity of immediate beneficiary designation.