A beneficiary is a term used to refer to an individual or an organization that is the recipient of money - or some other kind of benefit - from another party. The party that bestows the money is called a benefactor. The term beneficiary can be used in a lot of different ways, but perhaps the most common use is for individuals who receive the money from an insurance policy. When an individual takes out a life insurance policy, for example, he must indicate at least one beneficiary. This person will be the one to receive the pay out from the insurance company when the policy holder dies.
Another very common use of the term beneficiary is for people who receive an inheritance. When an individual makes his will, he does so to ensure that whatever he leaves behind will be distributed accordingly. The people who receives the deceased’s estate - whether in part or in whole - are the beneficiaries. In this case, it might be that the beneficiary receives something else other than money. More so, beneficiaries of an inheritance may be an organization or some other entity. It is not uncommon for churches, charitable organizations, schools, and the like to be recipients of the goodwill of some benefactor. These kinds of organizations are actually often identified as beneficiaries in wills.
In a slightly different context, recipients of donations are also dubbed beneficiaries. For example, a benefactor may decide to donate money to build a playground for a poor community. The members of this community are the beneficiaries of the aid.