When the primary beneficiary of life insurance dies, the death benefit is split up among the other primary beneficiaries, if there are any others on the policy. If there are no other primary beneficiaries, the money goes to the contingent beneficiaries. If there are no living contingent beneficiaries, the money goes to the estate upon the death of the insured.
To avoid the money going to the estate, the owner of the policy can select a new primary beneficiary, or just be sure that there are other beneficiaries that are still alive, to receive the life insurance proceeds someday. It only takes a simple form to designate a new beneficiary.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
If in the unfortunate situation the primary beneficiary of your life policy dies, then if you should die without naming a new primary beneficiary, the proceeds from your policy would be paid to your named contingent beneficiary. It is always a good idea to review your Life Policy periodically with your Insurance Professional to make sure that it still meets your needs and to manage any life changes, such as this, may have happened so that you can amend your policy accordingly to keep it up to date.
If the primary beneficiary dies before the insured, the benefits would roll to the contingent beneficiary if one was named on the application. If there is no other beneficiary the life proceeds would be paid to the estate which could trigger income taxes for heirs on what should have been a tax free benefit. It is imperative to keep up with such events and keep the beneficiaries up to date on your life insurance policies.
.JPG){kind=avatar}
To avoid the money going to the estate, the owner of the policy can select a new primary beneficiary, or just be sure that there are other beneficiaries that are still alive, to receive the life insurance proceeds someday. It only takes a simple form to designate a new beneficiary.