An Easy-to-Understand Definition of Beneficiary, Example Sentences and Dialogues

English Vocabulary Lesson

In this lesson, we will look at the definition of beneficiary, as well as example sentences and easy dialogues that show how this word is used in context.

Do you know what a beneficiary is? It is an important concept that can help you in various parts of your life. From finance to law, "beneficiary" can have different meanings – and we are here to explain it all!

Lesson Table of Contents

1) "Beneficiary" Definition in Insurance

2) "Beneficiary" Definition in Banking

3) "Beneficiary" Definition in a Trust

4) "Beneficiary" Definition in a Will

5) "Beneficiary" Definition in Law

6) A Dialogue Showing How to Use the Word "Beneficiary" in Context

7) Another Dialogue Showing How to Use the Word "Beneficiary" in Context

8) Example Sentences with the Word "Beneficiary"

Click Here for Step-by-Step Rules, Stories and Exercises to Practice All English Tenses

"Beneficiary" Definition in Insurance

A beneficiary in insurance is someone who will receive money if something bad happens.

For example, if a person buys an insurance policy and they pass away (die), then the beneficiary gets the money from the insurance company.

The amount of money they get depends on the agreement between the person who paid for the insurance and the insurance company.

For example, Lucas has a life insurance policy (contract) and he names his son, Marco, as the beneficiary. According to the policy, if Lucas passes away, Marco will get $100,000 from the insurance company. To keep the policy active, Lucas pays regular insurance premiums of $50 per month.

Another example:

Mia has a car insurance policy and if something were to happen to her car, the beneficiary (Mia in this case) will get money from the insurance company.

Now let's say that Mia has unfortunately been in an accident, and her car is damaged beyond repair. She will receive the value of the car at the time of the accident, minus any deductible she may have.

In this case, Mia's car was worth $15,000 and her deductible was $500. Therefore, Mia will receive $14,500 from the insurance company. She will receive this money because she is the beneficiary of the car insurance policy.

"Beneficiary" Definition in Banking

A beneficiary in banking is someone who will receive money that has been transferred from a bank account.

For example, if you have a bank account that contains money and you want to send it to somebody else, then the person you are sending money to is the beneficiary.

Let's say that Mark has $20 in his bank account, and he wants to send it to his brother, Tom. Mark would log into his bank's website and enter Tom's name as the beneficiary of the transaction. This means that when Mark sends the money, it will be sent directly to Tom's bank account.

Another meaning of beneficiary in banking is someone who will receive money in case of death. For example, if Mark had a bank account and he named Tom as the beneficiary of his account, then when Mark passes away, Tom will receive the money in Mark's account.

"Beneficiary" Definition in a Trust

A beneficiary in a trust is someone who will receive the money from a trust.

A trust (also called a trust fund) is a legal agreement where one person (the grantor) transfers money or property to another person or organization (called a trustee), to manage the money or property for the benefit of a third person (the beneficiary).

The trustee is responsible for managing, investing, and distributing the assets of the trust to the beneficiary according to the terms of the trust.

For example, let's say that Gabriel sets up a trust and names his 5-year-old daughter, Sophia, as the beneficiary.

In this case, Gabriel gives $100,000 and some real estate to the trustee (which could be a lawyer or bank), and instructs the trustee to manage the assets for Sophia until she turns 21. At that point, the trustee will transfer the $100,000 and real estate to Sophia (the trust beneficiary).

This ensures that Sophia will receive the money and property when she is old enough to manage it.

"Beneficiary" Definition in a Will

A beneficiary in a will is someone who will receive money or property according to the official instructions of the person who wrote the will (the testator).

A will is a document someone writes that states who should receive money and property when he or she passes away.

For example, if Jenny writes a will and names her brother Noah as the beneficiary of a certain amount of money, then when she passes away, Noah will receive that amount of money according to her wishes.

In this case, Noah is a beneficiary of the will.

"Beneficiary" Definition in Law

In law, a beneficiary is someone who will receive the benefits of an agreement, contract, or another legal document. (Benefits are payments in the form of money, property, or other rights).

For example, if a contract states that Alex is to pay Amina $400, then Amina is the beneficiary of the contract.

Another example of a beneficiary in law is when there is a court order. For example, if the court orders company A to pay company B $100,000, then company B is the beneficiary of the court order.

So as you can see, a beneficiary is someone who will receive the benefits of a legal document. Benefits are payments in the form of money, property, or other rights.

A Dialogue Showing How to Use the Word "Beneficiary" in Context

Ava: My dad set a trust fund for me, so I'm going to be the beneficiary when he passes away.

Lauren: Really? Who is the trustee?

Ava: My uncle. He'll be in charge of managing the money until I'm old enough to manage it myself.

Lauren: When can you get the money?

Ava: When I turn 25. Or if I get married before then, the trustee can decide to give me the money earlier.

Lauren: I wonder why your dad chose 25 as the age.

Ava: I guess he wanted to make sure I would be mature enough to handle a large sum of money responsibly.

Lauren: That makes sense. So you're the beneficiary of the trust fund, and your uncle is the trustee. Got it! But who is the grantor?

Ava: My dad. He's the one who set up the trust fund and provided all of the money.

Lauren: I wonder if my dad has a trust fund set up for me.

Ava: If he does, then you're the beneficiary!

Another Dialogue Showing How to Use the Word "Beneficiary" in Context

Rafael: My aunt passed away.

Lucy: I'm so sorry to hear that. My condolences.

Rafael: Thank you. I actually did not know her that well, but I'm the beneficiary of her will.

Lucy: Oh... What does that mean?

Rafael: Her will states that I'm the beneficiary of her house and all of her other assets. She also owned a company, and I'm the beneficiary of that as well.

Lucy: Which company is it?

Rafael: It is a tech company that develops apps for smartphones.

Lucy: Wow, your aunt must have been very successful.

Rafael: Yes, she was. I'm glad that I'm the beneficiary of her legacy. I will make sure to take good care of her company.

Lucy: I'm sure she would be proud.

Rafael: Thank you for your kind words.

Example Sentences with the Word "Beneficiary"

• The beneficiary of Tim's life insurance policy is his wife.
• When you open a bank account, you can choose who will be the beneficiary.
• The trust document specified that the children are the beneficiaries of the estate.
• I am the sole beneficiary of my grandmother's estate.
• The trust fund is set up so the beneficiary will receive payments until they turn 18.
• His dad's life insurance policy names him as the beneficiary.
• The court ordered the company to pay beneficiaries $500,000 in damages.
• My grandmother named me as the beneficiary of her will.
• Joe is the beneficiary of his uncle's will.
• Maria is the beneficiary of her father's bank account.
• Several beneficiaries were named in the will.
• The beneficiary of the fund will be announced at a later date.
• The beneficiaries of the trust are the minors.
• Every beneficiary of the program will receive a $500 check.
• Beneficiaries of the trust fund will receive their payments annually.
• All beneficiaries are eligible for a tax deduction.
• The charity's main beneficiaries are children in need.
• The program's primary beneficiaries are low-income families.
• The company distributed its profits to its shareholders as beneficiaries.
• He named his girlfriend as the sole beneficiary of his life insurance policy.
• The grant will be provided to the beneficiary organization within 30 days.

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