Question

A primary beneficiary has died before the insured in a life policy. A contingent beneficiary is also named in the policy. What will occur when the insured dies?

a) The policy proceeds will go to the insured's estate.
b) The policy proceeds will be paid to the contingent beneficiary.
c) The policy will lapse, and no proceeds will be paid.
d) The policy will be voided.

Answer 1

When the primary beneficiary in a life policy has predeceased the insured, the policy proceeds will be paid to the contingent beneficiary named in the policy.

Step-by-step explanation:

If a primary beneficiary has died before the insured in a life policy, and a contingent beneficiary is also named in the policy, then when the insured dies, the policy proceeds will be paid to the contingent beneficiary. This is the plan in place for such a scenario, ensuring that the proceeds of the policy are disbursed as intended by the insured.

If no contingent beneficiary was named, then the proceeds might go to the insured's estate and be distributed according to intestacy laws, which dictate how assets are divided if someone dies without a will.