Ifone of the beneficiaries of a life insurance policy dies before the person the life insurance is on, do their children get the proceeds?

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Ifone of the beneficiaries of a life insurance policy dies before the person the life insurance is on, do their children get the proceeds?

My husband and his 2 aunts are beneficiaries to his grandfather’s life insurance policy (they are the 3 beneficiaries written on the policy). One of his aunts passed away 15 months ago. That leaves 2 surviving beneficiaries. Will the proceeds still be split into thirds and her part go to her children or does the proceeds of the policy just go to the “living beneficiaries”?

Asked on July 25, 2011 Tennessee

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If the primary beneficiary dies before an insured then the proceeds are payable to the the person named as "contingent" (back-up) beneficiary. If none was listed then under those circumstances, the general rule is that the proceeds would be paid to the insured's estate. 

In this case it's not clear who is primary or contingent beneficiary. However, in either case, whoever survives the insured is entitled to the proceeds. To the extent one or more beneficiaries do not outlive the insured then their is share is forfeited and the proceed are payable to the surviving beneficiaries. Again, to the extent no beneficiary survives, then the provides would be payable to the insured's estate. 


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