If the sole beneficiary of a life insurance policy dies before the insured, what happens to the policy's death benefit?

The death benefit of a life insurance policy is generally designed to be distributed according to the beneficiary designations outlined in the policy. When the sole beneficiary dies before the insured, the policy's terms dictate how the benefits are handled. If there is no contingent or secondary beneficiary named in the policy, the death benefit typically defaults to the insured’s estate.

This means that the amount intended for the beneficiary will be paid to the estate of the insured, which may then be distributed according to the terms of the deceased’s will or according to state law if there is no will. This ensures that the intended financial support provided by the life insurance policy can still be utilized, even if the primary beneficiary is no longer living.

For policies that do have a designated secondary beneficiary, the funds would go to that individual instead. However, in the absence of a secondary beneficiary, the estate route is the correct and standard approach.