If the sole beneficiary of a life insurance policy dies before the insured, where do the policy proceeds go?

In the scenario where the sole beneficiary of a life insurance policy dies before the insured, the policy proceeds generally go to the insured's estate. This situation arises because, in the absence of a designated contingent beneficiary, the life insurance proceeds must be channeled according to the policy's terms and applicable laws.

When a beneficiary passes away before the policyholder and there is no alternate beneficiary designated, the life insurance contract typically stipulates that the proceeds revert to the insured's estate. This implies that the money will be distributed according to the deceased's will, or, in the absence of a will, as dictated by state intestacy laws. This outcome serves to ensure that the benefits are allocated within the scope of the insured's overall estate plan, maintaining legal and financial order in the transfer of assets.

Understanding this process highlights the importance of having both primary and contingent beneficiaries designated within a life insurance policy to prevent complications and ensure that the intended recipients receive the proceeds without unnecessary delays or legal entanglements.