Life Insurance Policy Without Beneficiary – Who will Get the Amount? 

Usually, life insurance plans are upfront: once the policyholder dies, the insurer pays the death payout to the beneficiary of policy, whether it is an individual or entity. Though, things get complex when it is confusing to whom the profits will be transferred. What happens with a plan when no policy beneficiary is designated?

Read more
Get ₹1 Cr. Life Cover at just ₹449/month*
No medical checkup required
Save more with upto 10% discount
Covers COVID-19
Tax Benefit
Upto Rs. 46800
Life Cover Till Age
99 Years
8 Lakh+
Happy Customers
*Tax benefit is subject to changes in tax laws. *Standard T&C Apply
** Discount is offered by the insurance company as approved by IRDAI for the product under File & Use guidelines
Get ₹1 Cr. Life Cover at just ₹449/month*
No medical checkup required
Save more with upto 10% discount
Covers COVID-19
View plans
Please wait. We Are Processing..
Get Updates on WhatsApp
By clicking on "View plans" you agree to our Privacy Policy and Terms of use

Who will get the amount if the beneficiary dies before the policyholder? Such conditions can cause important variations in how the profits are distributed and may affect the claim that several beneficiaries make to avail the death benefit. Read on to know more about these questions: 

What is a Life Insurance Beneficiary? 

A Life Insurance Beneficiary is an individual or organization that you choose to receive the death benefit of your policy when you die. Your beneficiary can be your child or your spouse. 

What Happens if the Beneficiary of a Life Insurance Policy Dies Before the Insured? 

Life insurers must pay the profits to those mentioned as beneficiaries. They can be the policyholder’s spouse or his/her ex-partner, children, business partners, siblings, trust, or a charity. The policyholder can list a number of beneficiaries at the same time. Besides naming a primary beneficiary of life insurance policy, they can also appoint a secondary beneficiary. Secondary beneficiary will get the death benefit in the situations when the primary beneficiary is not available or cannot be found or dies before the policyholder, or dies with the policyholder. 

The main concern is Who inherits the proceeds if there is no beneficiary? So, if the primary life insurance beneficiary dies in an unfortunate event and there is no secondary beneficiary assigned, the plan is regarded as having no listed beneficiaries. Without a mentioned beneficiary to claim the death payout, the benefit is paid to the deceased’s estate. In this situation, it can take a longer time for the profits to get to the family of the policyholder and the amount is likely to be subjected to taxes of estate. 

What if the Policyholder and the Primary Beneficiary Dies at the Same Time? 

Complexities start when the primary beneficiary and insured dies within 24 hours i.e., 1 day of each other. Based on the condition of who dies first, the payout will be provided to the policyholder’s dependent beneficiary, their estate, or their beneficiary’s estate. 

Let’s understand this with the help of an example: 

If the insured and the primary beneficiary were in the same deadly car accident, and there is valid proof of living beneficiary a few minutes before the policyholder, the death benefit is payable to a beneficiary’s estate. If the beneficiary passes away first, then the death payout will be paid to the dependent beneficiary. And, if in case there is no dependent beneficiary, then it will be transferred to the dead insured’s estate. 

If it is not clear whether the beneficiary or policyholder died first, then the insurer will assume that the policyholder survived the beneficiary and the benefit will be paid to the dependent beneficiary. 

Who Receives the Death Policy Payout if the Beneficiary Dies Before the Benefit is Paid? 

If in case the primary beneficiary dies in an unfortunate event before claiming, processing, approving, and paying the policy benefit, the death payout will go to the estate of the beneficiary. Even if the policyholder had a dependent beneficiary mentioned, the primary beneficiary will receive the payout since they were alive during the policyholder’s death. 

How to find the Life Insurance Policies of a Deceased Parent? 

There are a number of things you should do when your parents die. One of your priorities will be finding different ways to pay for the final expenses, which includes insurance policies. Follow the below steps to find a lost life insurance policy: 

  • Search for the life insurance policy-related documents 

  • Check for the policy in bank-statements 

  • Talk to your financial advisor or attorney 

  • Examine the application of your life insurance policy 

  • Go through the emails of the deceased parents 

  • Contact the previous employers 

  • Look out for income tax returns 

  • Search in the government database that is available online 

  • Contact the officials of the unclaimed property 

  • Get in touch with the state insurance department 

  • Wait for the insurer to contact you

What happens to Unclaimed Life Insurance Policies? 

In case of a policyholder’s death, insurers do not always take it upon themselves to search for surviving beneficiaries. Although companies have access to their death records, they often do not take notice of the death of policyholders and delay payouts until the beneficiary makes a claim. Unfortunately, every beneficiary is not aware of the life insurance claim process which leads to an unclaimed insurance amount that goes to the state or gets stuck. 

Life Insurance Beneficiary Rules for Spouse 

Generally, a spouse does not have any right to claim the life insurance amount if someone else is appointed as the beneficiary except in the case of community property rates. In a community property state, both the partners have equal shares on any earned income and any other property bought using that money. Term life insurance is the community property that gives 50 percent right to the spouse on the death benefit and the remaining 50 percent will be paid to the appointed beneficiary. 

Wrapping It Up! 

If you die with an active policy, then the payout will be provided to your beneficiaries. It is important to keep your beneficiaries up to date and to have dependent beneficiaries in case your primary beneficiary cannot receive the payout. If all your beneficiaries die and you do not update the life insurance policy, then the death benefit will be paid to your estate and is subjected to fees and taxes.

Types of Term Plans

Life insurance articles

Recent Articles
Popular Articles
Post Office Gram Suraksha Scheme Calculator

27 Jun 2022

A Post Office Gram Suraksha Scheme calculator is a useful online...
Read more
What happens if you stop paying life insurance premiums?

03 Jun 2022

Buying the best life insurance plan is a wise and learned...
Read more
Postal life Insurance Tax Benefits

26 May 2022

Postal Life Insurance is the oldest life insurer in the country...
Read more
How to Download PLI Statement Online?

24 May 2022

PLI or Postal Life Insurance was an initiative originally...
Read more
Is Life Insurance an Investment?

24 May 2022

The thumb rule to building wealth is to invest your money in...
Read more
How to Check LIC Policy Status, Details, Statement via Online/SMS/Call
Last year, Mr. Rajiv Verma bought a Child LIC policy to provide financial security for his kid's future. However...
Read more
How to Cancel SBI Life Insurance Policy?
As per the Insurance Regulatory and Development Authority, you can cancel a life insurance policy taken within 15...
Read more
SBI Life Insurance 50,000 per year Plan for 5 Years
Life insurance is not only about the financial protection of the family but also about working for life’s...
Read more
PLI Santosh Maturity Calculator
Maturity calculators have proven to be one of the simple tools for digital-savvy insurance buyers. Postal Life...
Read more
Surrender Value in Insurance
Have you bought a life insurance policy which is not as per your requirement? Are you planning to terminate the...
Read more
Download the Policybazaar app
to manage all your insurance needs.