Someone had a life insurance through his work. He named a beneficiary who subsequently died. The policy wasn’t changed. So who is in line for the policy? The insureds family or the named beneficiaries family?

  1. 11498 POINTS
    Jason GoldenzweigPRO
    Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
    Life insurance policies have a primary beneficiary and a contingent beneficiary. A contingent beneficiary is, in short, a backup beneficiary in the event the primary beneficiary predeceases the insured person. If a contingent beneficiary was named, then the contingent beneficiary would be the recipient of proceeds upon the death of the insured.

    If no contingent beneficiary is named on the policy, then it will default to the estate of the insured person and then the monies will have to go through the probate process through courts and a judge will decide how they shall be distributed.

    Changes to a beneficiary can be made during the life of the policy by the policyowner. If the policy is set up under a group term program, then the insured may need to contact the employer (i.e. HR dept) to make changes.

    If you need help with your individual life insurance program, please feel free to contact me.
    Answered on January 27, 2017
  2. 21750 POINTS
    Jim WinklerPRO
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! As Mr. Goldenzweig mentioned, the contingent beneficiary would be next in line to collect the proceeds of the policy. The owner of the policy (I am assuming the insured) can contact the HR department and name a new beneficiary if there was no contingent beneficiary named, or if that choice has changed over time. It is important that a beneficiary is named, as it can get messy when the proceeds fall into the estate, as opposed to the generally smooth payment to the named beneficiary. Taxes and court costs can eat a big piece of estates, especially if there are differences of opinion on how that estate was to be divided.
    Changing one's beneficiary is a very simple process, usually just filling out a simple request form, and can be done as often as one might wish. You did well to recognize the issue, and react quickly to it. I see often when the named beneficiary was a relative or ex that was never changed when they passed or were divorced, and the mess that the oversight creates is always an extra grief that isn't needed. If you need help, or have any further questions, please do not hesitate to contact me, okay? Thank you for asking!
    Answered on January 31, 2017
  3. 11773 POINTS
    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    If the Beneficiary dies before the insured the policy would then move to the contingent beneficiary named in the policy. If there is no contingent beneficiary the owner can declare a new primary beneficiary. If the policy owner fails to name a beneficiary the proceeds would become part of the estate of the insured.
    Answered on February 9, 2017
  4. 616 POINTS
    Robert J Russell - Finalist for Broker of the Year 2015
    Broker Owner, InsuranceAgentsSelling.com, United States (Most States)
    In this case many things could happen - the first thing the insurance company will do is make sure that it is not in the contestable period - which lasts 2 yrs after issue date. Then they will go to the contingent beneficiary and that person would receive the benefits.

    I can give a blanket answer and say what happens if there is no contingent beneficiary because different companies have different ways of doing business but I know this - MAKE SURE that you have a primary and contingent person named now....don't put this off
    Answered on February 11, 2017
  5. 63333 POINTS
    Peggy Mace, Certified Senior Advisor (CSA)®PRO
    CEO, Outlook Life, Inc, Most of the U.S.
    If the beneficiary is deceased and there is no other beneficiary named, upon the death of the insured person, the money would go to the estate of the insured person.

    Here's an example of turmoil this can create. Let's say the Insured wants to leave money to his beloved biological child, who is living with his irresponsible ex-wife who his current wife detests. He names his brother as beneficiary so his child will be sure to get the money. Brother dies. Policy stays the same. Insured person dies. Money goes to Daddy's estate and biological child gets nothing.

    All it takes to avoid this is to name a contingent beneficiary when the policy is taken out, or simply name a new beneficiary if the current beneficiary passes.
    Answered on February 28, 2017
  6. 37 POINTS
    Michael Jarrell
    Licensed Agent, New York Life, Milwaukee, WI
    If the primary beneficiary dies before the insured, then no one is paid. The death benefit is only paid when the insured passes away. The insured, in most cases, is also the owner. If you are the owner of a policy, then you can change, add, or remove a beneficiary as necessary.
    Answered on March 20, 2017
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