Primerica Life Producer Practice Test

What happens to the benefits of a policy if a named beneficiary passes away and no new beneficiaries are named?

1. They are paid to a charitable organization

2. They revert back to the insurance company

3. They go to the estate of the insured

4. They cannot be claimed

The correct answer is: They go to the estate of the insured

When a named beneficiary passes away and no new beneficiaries have been designated, the benefits from the insurance policy typically go to the estate of the insured. This situation occurs because the insurance proceeds cannot be distributed to an individual who is no longer living to receive them. Since there is no living beneficiary to claim the death benefit, the funds will instead be directed to the estate, where they will be subject to probate and distributed according to the terms of the insured's will or, if there is no will, according to state laws governing intestate succession. This ensures that the benefits are not lost or left unclaimed but instead are incorporated into the deceased insured's estate, where they can be managed alongside other assets and debts of the estate.