Define a secondary beneficiary.

A secondary beneficiary refers to an individual or an entity that is designated to receive policy benefits only if the primary beneficiary is unable to claim them. This provision acts as a safety net to ensure that the policy proceeds are distributed according to the policyholder's wishes, even in scenarios where the primary beneficiary has passed away or is otherwise unable to collect the benefits. By having a secondary beneficiary, the policyholder can help ensure that their intentions for distributing the policy benefits are fulfilled, providing an additional layer of security and clarity in the estate planning process.

The other options don't accurately define a secondary beneficiary. For instance, stating that a secondary beneficiary will always receive policy benefits (as in the first option) does not convey the conditional nature of their entitlement. Similarly, suggesting that the policyholder themselves is a secondary beneficiary doesn’t align with the role that beneficiaries play in insurance policies. Finally, while a legal entity can indeed be designated to receive benefits, this does not specifically address the conditions under which secondary beneficiaries obtain benefits.