life insurance with no beneficiary

What Happens to Life Insurance With No Beneficiary?

Life insurance policies provide a financial benefit to the people left behind when someone passes away. This money is available to cover burial expenses, pay off debt, replace lost income, and more. But what happens to life insurance with no beneficiary? Where does the money go and who gets it?  

This article will delve into what happens to life insurance with no beneficiary. 

Life Insurance Beneficiaries

When you purchase a life insurance policy, you’ll fill out the beneficiary information so that the insurance company knows who to pay when you die. Generally, you’ll provide a primary and a secondary beneficiary.

Primary Beneficiary

Primary beneficiaries are the first in line to receive the death benefit from a life insurance policy upon the insured’s passing. Policyholders typically designate one or more primary beneficiaries, specifying the percentage or amount of the death benefit each beneficiary should receive.

Types of Primary Beneficiaries:

Individuals: Spouse, children, family members, or friends can be named as primary beneficiaries.
Entities: Trusts, charitable organizations, or businesses can also be designated as primary beneficiaries.

Secondary Beneficiaries

Secondary beneficiaries, also known as contingent beneficiaries, step in to receive the death benefit if the primary beneficiaries are deceased or unable to claim the benefits for any reason. Including contingent beneficiaries provides a backup plan to ensure that the policy benefits still go to intended recipients.

Reasons for Contingent Beneficiaries:

1. Simultaneous Deaths: In cases where the primary beneficiary and the insured pass away simultaneously, contingent beneficiaries ensure the seamless transfer of benefits.
2. Primary Beneficiary Unavailability: If the primary beneficiary cannot be located or is legally ineligible to receive the benefits, contingent beneficiaries step in.

what happens to life insurance with no beneficiary

What happens in the event of the death of your only beneficiary? 

In the event of the premature demise of your sole beneficiary prior to that of yourself, your face value will be given to your contingent beneficiary. 

As long as no contingent beneficiary is named, your face value will go to your estate. This will take time before your death benefit reaches your loved ones. It is very likely that there will be fees and taxes for your face value. 

Therefore, do always keep updating your beneficiaries with your life insurer. The majority of life insurance providers let you update them via the internet or over a phone call whereas a paper form needs to be delivered or faxed in for some life insurance firms.   

Be mindful of providing the life insurance provider all the relevant information in detail if you need to make changes in your beneficiaries. 

The information should have a full legal name, current address and date of birth. Ensure you go through the information several times for the purpose of its accuracy. Additionally, your beneficiaries will need to identify themselves prior to the payout of your face value. 

What happens if you and your beneficiary pass away simultaneously? 

Assume that you and your partner pass away at the same time in a deadly car accident or a fatal extreme sport accident. The face value can go to the estate of your partner or be given to a contingent beneficiary. 

As long as there is physical evidence that shows that your partner last even only minutes longer than you, then your face value would go to your estate in this case.  

On the other hand, if physical evidence of you outliving your partner exists, your face value will go to your contingent beneficiary. However, if you do not name a contingent beneficiary, it will go to your estate. 

What if there is no physical evidence of who lived longer? 

If this is the case, your life insurer will assume that you lived longer than your primary beneficiary and will pay the death benefit to your contingent beneficiary if one is mentioned. Otherwise, it will go to your estate.  

What if no life beneficiary is listed? 

Occasionally, people do not list beneficiaries’ names on their life insurance policies. If this is the case, then the death benefit of life insurance goes to the estate of the deceased. 

What does an estate in life insurance mean? 

An estate is defined as all of your possessions. These possessions refer to property and investments. Whenever the life insurer distributes a death benefit, it forms part of the estate. 

The estate’s result relies on a handful of factors, including your residency, your will and your outstanding debts. 

Firstly, different countries have different laws. The second factor is possession of a will or outstanding debts. Generally speaking, a probate court supervises your estate. As soon as your estate is under supervision of probate court, it might take a year or longer for your loved ones such as your heirs to get your death benefit. 

However, if you have debt, your heirs probably do not get your life insurance payout. In addition, your estate needs to be taxed. This means that your heirs could receive even smaller amount of the face value of your life insurance policy. 

What if you have no desire to let your death benefit go to your estate? 

Actually, the fact that your death benefit goes to your estate is not a good idea. The reason is that when your death benefit goes to your estate, it needs to be taxed. It might take over a year for the probate court to resolve this issue. This means that your death benefits are not paid out at once even if there are any remaining benefits to pay following taxes and debt. 

As long as no will exists, your estate will follow laws to seek for an heir. If no living heir or relative exists, the state will take your remaining assets. 


On the whole, If no primary beneficiary exists, the face value of your life insurance policy goes to a contingent beneficiary. If your life policy has no contingent beneficiary, your face amount will go to your estate.  

As soon as the face value is in your estate, the death benefit will be taxed and used to pay your remaining debt.   

If there is no heir, the state has the right to keep your assets. 

Consequently, always updating your beneficiaries on your life insurance policy as well as listing a few contingent beneficiaries are very important. 

A great alternative to make sure your assets which include your death benefit are paid out to your family is to create a will. Possessing a will can make things process faster and makes it possible for your loved ones to receive the things you aim to provide them. Purchasing life insurance is an inexpensive way to create an estate for your loved ones in case you pass away. It is important to name primary and secondary beneficiaries on your policy to ensure that they receive the money. When life insurance does not have a beneficiary, the death benefit is part of your estate. Without a living trust, your estate goes through probate and is subject to fees, taxes and delays.  


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