Primerica Life Producer Practice Test

When beneficiary designations are not updated after a beneficiary's death, which party typically receives the benefits?

1. The insurance company

2. The deceased beneficiary's estate

3. The insured's estate

4. The surviving family members

The correct answer is: The insured's estate

When beneficiary designations are not updated after a beneficiary's death, the benefits from the insurance policy typically go to the insured's estate. This occurs because the deceased beneficiary is no longer eligible to receive the policy benefits, and without a valid designation for another party, the insurance proceeds follow the default rules established within the policy and applicable laws. These rules generally dictate that if a beneficiary predeceases the insured and no alternative beneficiary is named, the benefits revert to the insured's estate. This process highlights the importance of keeping beneficiary designations current to ensure the intended recipients receive their benefits without unnecessary delay or complications that can arise from probate proceedings involving the estate. In contrast, the other options involve parties that generally do not receive benefits in this scenario, as the structured beneficiary designation plays a crucial role in the distribution of policy proceeds.