What is a beneficiary in the context of insurance?

In the context of insurance, a beneficiary is the person who receives the insurance money when a claim is made, typically upon the death of the insured individual or when a specified event occurs. This role is crucial because it designates who will financially benefit from the insurance policy's value. The beneficiary is usually named when the policy is created, ensuring that the intended recipient has a clear right to the proceeds of the policy.

Understanding this role is important for both policyholders, who need to select their beneficiaries carefully, and for potential beneficiaries, who must be aware of their rights in relation to the policy. In contrast, the other roles described do not involve receiving benefits from the insurance policy; they are either responsible for making payments, evaluating claims, or selling the policy itself. This distinction highlights the unique purpose of a beneficiary within the insurance framework.