The insurance company will determine if there are primary co-beneficiaries named in the policy. If there are, the proceeds will be divided among these co-beneficiaries. When one of the co-beneficiaries dies, the remainder of the proceeds will be paid out to the surviving beneficiaries.
When the one insured in a life insurance policy dies the proceeds go to the named beneficiary. If the beneficiary dies ahead of the insured, the proceeds will still be paid out.
These are individuals who will get to receive the proceeds when all primary beneficiaries are deceased. For example, under a policy the wife is named the primary beneficiary and a son is named as secondary beneficiary. The husband may have wanted that the son receives the proceeds only in the event the wife dies ahead of him.
But if your primary beneficiary dies before you do, then the death benefit would be paid to any contingent beneficiaries that you named on your application. If there are no contingent beneficiaries, then the death benefit will most likely be paid directly into your estate.
Under this law, if the primary beneficiary is deceased and there is no alternative beneficiary named in the will, the estate will pass to the heir(s) of the primary beneficiary. The law generally applies only if the deceased beneficiary was either the testator's grandparent or a direct descendant of a grandparent.
If the owner dies before the insured, the policy remains in force (because the life insured is still alive). If the policy had a contingent owner designation, the contingent owner becomes the new policy owner.
Under California Probate Code §21110, if a named beneficiary dies before the Will-maker, the heirs (i.e. kindred/related by consanguinity) of the deceased beneficiary may, based on several requirements, inherit the gift in his/or her place.
If the primary beneficiary dies, their potential share of the benefits will be paid to the named contingent beneficiaries. If there are no secondary beneficiaries, the death benefit would be passed to the policyholder's estate.
Specifically, in this case, it sets down what happens when a beneficiary dies before the person who has drawn up the will. The basic rule is that what they were going to receive goes back into the residue of the estate unless there is a specific alternate beneficiary named.
As discussed above, the general rule is that gifts to beneficiaries who have passed away before the testator will lapse. However if the deceased beneficiary is the testator's child, then the gift to that beneficiary would not lapse if section 26 of the Wills Act applies.
There are typically two levels of beneficiary: primary and contingent. A primary beneficiary is essentially your first choice to receive the death benefit if you pass away.
The beneficiary is the true heir to the policy proceeds, after the demise of the policyholder. A beneficiary can be a person who is insured (in case it's a money-back or endowment policy), proposer, or his nominee or assignee or someone who has been proved to be an executor or administrator.
Generally if a beneficiary dies before the deceased, the beneficiary's gift will lapse (fail) and they will not inherit anything from the deceased's estate. Whatever they were due to receive will fall back into the deceased's residuary estate to be redistributed.
The state of California has an anti-lapse law that is put in place in the event that a beneficiary passes away before the decedent. With this statute, the beneficiary's share of the estate will pass down to the beneficiary's heirs or issue, rather than reverting back to the decedent's estate.
If the intended recipient does not survive the testator by 30 days, the Will is interpreted as if that intended recipient had died immediately before the testator. 3.3 The Act does allow for this rule to be overridden if expressed in the Will.