Life insurance policies allow you to name one or more Primary Beneficiaries, and one or more Contingent (Secondary) Beneficiaries. If there is only one Primary Beneficiary named and that person is deceased, the policy proceeds go to the Contingent Beneficiary. If there is more than one Primary Beneficiary and one of them is deceased, the death benefit will be paid to the remaining Primary Beneficiary or Beneficiaries.
If all Beneficiaries are deceased at the time that the Insured passes away, the life insurance proceeds are paid to the estate of the Insured and distributed according to his/her will. If there is no will, the state distributes them according to their intestate succession rules. No doubt there are some exceptions to how policies are handled when all Beneficiaries predecease the Insured, but this is the general way it works.
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If all Beneficiaries are deceased at the time that the Insured passes away, the life insurance proceeds are paid to the estate of the Insured and distributed according to his/her will. If there is no will, the state distributes them according to their intestate succession rules. No doubt there are some exceptions to how policies are handled when all Beneficiaries predecease the Insured, but this is the general way it works.