When insuring someone else’s interests, there are always two parties represented by the insured and the insurer. Their relationship is determined by the framework of legislative acts, of which the main ones are the Civil Code, the Law on Insurance. The procedure itself implies the need to provide financial guarantees in case of violation or narrowing of the property and non-property interests of the parties. Upon the occurrence of an insured event, the beneficiary will receive compensation.
The idea of insurance is that “nothing lasts forever”: that is, any property, life, human health, civil liability can be violated or infringed. The insured, trying to put a "financial cushion", turns to the insurer in order to ensure possible risks with financial compensation. On the offensive insurance claims a third party appears, receiving “benefits” from the “financial pillow” of the insured. Such a person in legal practice is called the beneficiary.
Beneficiary selection features
A feature of the insurance concept of the beneficiary is the fact that its entry into the insurance relationship is not initially motivated by its wishes. First of all, the interests of the insured and the insurer are taken into account. In addition, the parties are not obligated to inform the beneficiary of the conditions and performance of the agreement concluded between them.
Thus, the beneficiary is a person called third in insurance contracts. This term is not enshrined in law, but the practice of insurance makes it possible to find out the main aspects of this concept.
Who is the beneficiary of insurance?
The beneficiary is in insurance both individuals and legal entities. In addition, the “appearance” of the beneficiary is not necessary; it may be the policyholder. But a mandatory requirement for the beneficiary in its pure form is disinterest in the occurrence of an insured event.
Often the beneficiary is the policyholder. This can be said if the subject of the transaction is personal property or health.
Personal and property insurance: specifics in determining the beneficiary
Different types of insurance dictate specific conditions for determining the beneficiary - the person receiving compensation payments in the event of a case specified in the contract.
When insuring property, the beneficiary is recognized as a person whose interests include the proper preservation of the insured property. It is with this type of insurance that the beneficiary simultaneously acts as a participant in the transaction.
Liability insurance resulting from harm, assumes that the beneficiary in this case automatically becomes the injured party.
Contractual liability involves the beneficiary in the person of the party to which this responsibility should be ensured under the contract. Business risk insurance obliges the beneficiary to recognize only the policyholder.
A special insured event is the death of the policyholder in personal insurance: in this situation, the heirs will be the beneficiary, unless otherwise specified in the contract.
Personal insurance assumes that if the beneficiary is not defined in it, then in the event of the death of the party to the transaction, heirs become him.Here is the answer to the question of who is the beneficiary in this case. However, you will not be able to immediately receive payments. All the nuances will be indicated in the contract. Payments will be made only from the moment of inheritance. Insurance legislation allows us to consider as beneficiary in such cases not only adults, but also minors and minors.
In addition, personal insurance in favor of a person who is not the insured can only be possible with the written permission of the insured person. Violation of this provision leads to the termination of the contract as a whole.
The appearance of the beneficiary allows us to consider insurance contracts of this type as a kind of so-called contracts in favor of a third party.
However, such transactions give an outsider not only rights, but also certain obligations, almost identical to the rights and obligations of the insured.
Beneficiary Rights
Thus, the beneficiary under the insurance contract has the following rights:
- receiving compensation payments upon occurrence of an insured event;
- waiver of the rights to the lost insured property in favor of the insurer in order to receive insurance payments in accordance with the insurance contract;
- the use of general legislative norms of the insurance field, regardless of the specific norms stipulated by the insurance policy;
- confidentiality of personal data of the beneficiary;
- Compensation for losses incurred in the amount of the insurance amount proportional to the insured value of the lost property;
- priority right to compensation before the insured;
- refusal of priority damages in favor of the insured.
Beneficiary's main responsibilities
The main obligations of the beneficiary include:
- fulfillment of obligations by the insured;
- ensuring the payment of insurance premiums, premiums previously agreed upon in the insurance contract;
- informing the insurer of significant changes in circumstances affecting the increase in insurance risk;
- notification of the occurrence of an insured event, provided that the beneficiary intends to qualify for insurance payments;
- transfer to the insurer of all information related to the subject and conditions of the insurance contract in the event of subrogation;
- providing the necessary documents confirming the occurrence of the insured event for beneficiaries under civil liability insurance contracts CTP, CASCO.
What is an insurance interest?
Another concept closely related to the object “beneficiary”, which needs to be paid attention to, is “insurance interest”. This is a kind of incentive for a deal. Most often, such interest is of a monetary nature - the ability to receive compensation in the event of an insured event.
Are insurance interest and insurance risk identical?
There are attempts to equate the insurance interest to insurance risk, but the practice of application does not allow to narrow both concepts. Insurance interest - monetary compensation in the event of an insured event, insurance risk - these are potential situations that threaten the property, the rights of the insured.
You need to understand that the insurance interest has a twofold nature: it can be experienced by the insured and the insured person. The dualism of this concept allows us to conclude that the beneficiary must have an insurance interest. Based on the foregoing, we formulate a definition of the concept of “beneficiary” - in insurance an individual or legal entity with an insurance interest in whose favor the contract is concluded.
Can the beneficiary in insurance be replaced?
At the discretion of the policyholder, the beneficiary, in the event that he has not yet fulfilled obligations under the insurance contract, may be changed upon written notification of the insurer. Otherwise, and also after the beneficiary has submitted claims under the insurance contract, it cannot be replaced. Personal insurance contracts provide for such a replacement, but it is carried out only with the written consent of the beneficiary.
When drawing up an insurance contract in which the beneficiary is specifically defined (this does not apply to CTP, CASCO, where the beneficiary cannot be known a priori, since it will be the victim in a traffic accident), insurance companies require filling out profiles of beneficiaries, such as we found out that there can be both individuals and legal entities.
Profiles of the beneficiary (individual, legal entity)
The questionnaire of the beneficiary-individual provides for the indication of the surname, name and patronymic, date of birth and citizenship. It also requires a reference to the data of the passport, identification code, pension certificate. In addition, a necessary condition for filling out such a questionnaire is to inform about the address of registration and actual residence if the latter does not coincide with the registration.
The questionnaire of the beneficiary legal entity must contain information on its full and abbreviated name, registration (tax identification number, main state registration number, registration date), address (legal and actual), about the participants, representatives of the organization (position, surname, name, patronymic, citizenship, date of birth identification code, passport details).
Conclusion
Summing up, we can say that the insured beneficiary is a person who receives compensation in the event of an insured event in accordance with the contract. However, this event is not always positive. This is especially true for personal insurance transactions. After all, along with compensation, the beneficiary also receives health problems, which are not always possible to solve even with financial support.
