Which of the following statements about contingent beneficiaries is true?

The statement that contingent beneficiaries receive benefits only if primary beneficiaries are deceased is accurate. Contingent beneficiaries serve as secondary recipients in a life insurance policy or a similar financial instrument. Their role is essentially to provide a backup option; if the primary beneficiary cannot receive the death benefit due to reasons such as dying before the insured or being unable to fulfill the designation, then the contingent beneficiary steps in to claim the benefits.

This arrangement ensures that the proceeds of the policy are directed away from the insured's estate, which can be beneficial for tax purposes and for managing the distribution of assets according to the policyholder's intentions. The other options reflect misunderstandings about the roles and rights of contingent beneficiaries in the context of insurance policies and estate planning.