What is the difference between primary and contingent beneficiaries on a life insurance policy in Ontario?

A primary beneficiary is the person you name to receive your life insurance money first. A contingent beneficiary is the backup, who may receive it if the primary beneficiary cannot. In Ontario, you can name yourself, your personal representative or a beneficiary to receive the money, either in the contract or by a declaration. A designation of "heirs" or "estate" is treated as naming your personal representative.

Whether a contingent beneficiary is paid depends on the policy wording and the facts, especially if a living primary beneficiary refuses the money, so confirm with the insurer or a lawyer first. If claims compete, or no one can give a valid discharge, an insurer that admits liability may apply to pay the money into court, and that application can be made after more than 30 days from when the money became payable.

Be careful with irrevocable designations. They must be made in the contract, or by a declaration filed with the insurer during your lifetime, and they cannot be changed without that beneficiary's consent. An irrevocable designation made in a will takes effect only as a revocable one.