term:

Beneficiary

beneficiary n

pl: -ries
: a person or entity (as a charity or estate) that receives a benefit from something: as
a : the person or entity named or otherwise entitled to receive the principal or income or both from a trust compare settlor, trustee

contingent beneficiary
: a beneficiary that may receive proceeds from a trust depending on the occurrence of a specified event (as the death of another beneficiary)

income beneficiary
: a beneficiary that according to the provisions of a trust is to receive income but not the principal of the trust NOTE: A trust may provide for income to be paid to someone (as a spouse) for his or her lifetime and then for payment of the principal to another person. A trustee is sometimes allowed to distribute some of the principal of the trust to an income beneficiary when necessary for the support of the beneficiary if support of the beneficiary was the purpose of the trust.
b : the person or entity named by the insured of a life insurance policy to receive the proceeds upon the insured's death

contingent beneficiary
: a beneficiary named to receive the insurance proceeds if the primary beneficiary has died called also secondary beneficiary

pri·ma·ry beneficiary
[prī-mer-ē-, -mə-rē-]
: a beneficiary named to receive the insurance proceeds before any other

sec·ond·ary beneficiary
[sek-ən-der-ē-]
: contingent beneficiary in this entry
c : a person or entity entitled under a letter of credit to demand payment from the issuer of the letter
d : a person or entity that benefits from a promise, agreement, or contract
;esp
: third-party beneficiary in this entry [the contractual beneficiaries…are mortgagees and investors "Key Pac. Mortg. Inc. v. Industrial Indem. Co., 845 P.2d 1087 (1993)"]

creditor beneficiary
: a direct beneficiary whom the party paying for the other party's performance intends to benefit as payment for a debt or obligation compare donee beneficiary in this entry

direct beneficiary
: a third-party beneficiary to a contract whom the parties to the contract intended to benefit compare incidental beneficiary in this entry

donee beneficiary
: a direct beneficiary whom the party paying for the other party's performance intends to benefit as a gift or donation

incidental beneficiary
: a third-party beneficiary to a contract whom the parties to the contract did not intend to benefit compare direct beneficiary in this entry

third-party beneficiary
: a person or entity that is not a party to but has rights under a contract made by two other parties

Source: Merriam-Webster's Dictionary of Law ©1996. Merriam-Webster, Incorporated. Published under license with Merriam-Webster, Incorporated.