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What Happens When Your Life Insurance Beneficiary is Deceased?

When you apply for life insurance, you may expect your beneficiary to live longer than you. However, there is a chance that they’ll pass away before they’re able to collect your death benefit. Keep reading to find out what can happen when your life insurance beneficiary is deceased and what you can do to protect your policy.

How beneficiaries work

A life insurance beneficiary is a person or entity that can receive the death benefit if you pass away while your policy is still active.1 As a policyholder, it’s your job to choose a beneficiary, which may be your spouse, adult child, or even a charity you support. You should name them on the life insurance beneficiary designation form, which is a legal document the life insurance company will use to determine who is entitled to the death benefit upon your passing.

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Types of beneficiaries

There are two main types of beneficiaries:1

  • Primary beneficiary: This person or entity is first in line to receive the death benefit if you die during your policy’s term.
  • Contingent beneficiary: A contingent beneficiary serves as a backup and is the person or entity you’d want to claim the payout if the primary beneficiary is deceased.

Who gets life insurance if your beneficiary is deceased?

The individual or entity that can receive your life insurance payout if your beneficiary dies depends on the unique situation:2

If your sole beneficiary dies

If your sole primary beneficiary passes away, the death benefit would go to any contingent beneficiaries you named when you applied for your policy. In the event you didn’t designate any contingent beneficiaries, the death payout would likely go directly into your estate.

If one of multiple beneficiaries dies

If you named more than one primary beneficiary and one of them dies, the remaining beneficiaries would be entitled to the death benefit.3 Typically, they’d each receive the same amount of money, but you can request a different type of distribution if you’d like.

If your contingent beneficiary dies

If your contingent beneficiary passes away, and your primary beneficiary is also deceased, any remaining beneficiaries will receive the payout. If there are no remaining beneficiaries, there’s a good chance the death benefit would be paid to your estate. Keep in mind that this will involve the probate process, which can take some time.

When your beneficiary is an organization that no longer exists

If you named an organization as a beneficiary but it doesn’t exist upon your death, the death benefit may be paid to your estate. A different organization that has taken over the organization you named may also collect the payout.

Tips for protecting your life insurance beneficiaries and policy

Here’s how you can protect your life insurance beneficiaries and policy:2

Name contingent beneficiaries

With a contingent beneficiary, you can ensure the death benefit doesn’t go to your estate. This strategy gives you more control over who benefits from your policy.

Consider naming more than one primary beneficiary

You might want to assign multiple people or entities as your primary beneficiaries. If one of them passes away or no longer exists, the remaining beneficiaries will receive the payout.

Update your beneficiaries as needed

When you go through life changes, like marriage, divorce, or childbirth, make changes to your beneficiaries if you’d like. Otherwise, your death benefit may go to a person or entity that is your second rather than first choice.

Keep your beneficiaries informed

Life insurance beneficiaries must file a claim and prove who they are in order to collect the death benefit. For this reason, it’s up to you to provide them with all the details of your policy and educate them on the claims process.

Keep your beneficiary list up to date

Make sure your life insurance beneficiaries are aware of your policy and what they need to do to receive the payout if you pass away while it’s active. If you only have a primary beneficiary, it’s in your best interest to add more primary beneficiaries or contingent beneficiaries.

Aflac offers term and whole life insurance plans. You can easily choose your beneficiaries and enjoy a convenient application process, along with affordable premiums. Chat with a representative today for a quote or more information.

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