If the primary beneficiary dies before the policy owner dies, the contingent beneficiary would be the next in line for benefits. If the policy owner is well, he or she would simply call the insurance company and request a "change of beneficiary" form and rename a new primary beneficiary. If it is the contingent who becomes primary then the owner would rename a new contingent beneficiary.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
When the primary beneficiary predeceases the insured of the life insurance policy, then the contingent beneficiary would receive the proceeds upon the insured's death (you can also set up a tertiary beneficiary in the event both the primary and contingent beneficiaries predecease the insured, although this is not usually done on most policies).
In the event that all beneficiaries die before the insured, then the proceeds would be paid out to the insured's estate. To avoid the proceeds being paid to the estate, many individuals set up a life insurance trust (revocable or irrevocable) to control how the proceeds are distributed and to keep it out of the calculation of the estate.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
If the beneficiary dies, the owner of the policy can change the beneficiary. Many policies contain provisions about the beneficiary dying simultaneously with the insured, these need special consideration. If the beneficiary dies and the policy isn’t altered, the contingent beneficiary will receive the proceeds. If there isn’t a contingent beneficiary the proceeds will be probated.
If you are the owner of a life insurance policy and your beneficiary has died, you should contact the insurance company to make a new primary beneficiary for your policy. It is a good idea to keep policy beneficiaries up to date so that your death benefit goes to the person and purpose for which you took out your policy.
.JPG){kind=avatar}
In the event that all beneficiaries die before the insured, then the proceeds would be paid out to the insured's estate. To avoid the proceeds being paid to the estate, many individuals set up a life insurance trust (revocable or irrevocable) to control how the proceeds are distributed and to keep it out of the calculation of the estate.