Who Gets Life Insurance If No Beneficiary?

What if there are no beneficiaries designated at the time of life insurance policies? Who gets the money?

Beneficiary Insurance Definition

A life insurance beneficiary is a person you wish to transfer your death benefit to. Many people choose life insurance policies to secure their families’ futures so they can manage expenses when the breadwinner dies.

Life insurance policies are an excellent option for people who have expected expenses in the future, like sending a child off to college or loan repayment, etc. So in case the policyholder dies, there is financial support to their families through life insurance death benefits.

Life insurance beneficiaries are decided at the time of the policy by the policyholder.

Who can be a beneficiary?

A beneficiary can be anyone from your spouse, children, organizations, or even social entities. When the policyholder dies, the entire death benefit is given to the recipients.

Life Insurance Beneficiary Rules

A primary beneficiary is a person who will inherit everything when the insured dies, and in case they were to die along with the policyholder too, the money will be inherited by contingent beneficiaries- who are second in line. In some cases, a tertiary beneficiary is also assigned who is ‘third-in-line.’ It gets the payout if primary and contingent beneficiaries BOTH die or refuse to make a claim. This is highly unlikely to happen, so some policies only let you name primary and contingent beneficiaries.

If the primary beneficiary dies while the policyholder is still alive, no payout is given to the primary beneficiary’s family on their behalf. A life insurance death payout will ONLY work when the insured person dies.

But what if there are no named beneficiaries?

In such a case, the entire death benefit is given to the policyholder’s estate and is then distributed by the court to surviving members of the family. If the policyholder has a surviving spouse or children, the entire estate is usually transferred to them even if they weren’t mentioned as beneficiaries at the time of the policy.

Contesting Life Insurance Beneficiary

Having people fight over the death benefit is everyone’s worst nightmare. It’s the last thing you want; to have your beneficiaries fight after you die. In many cases, a beneficiary dispute is widespread and may involve excess time, energy, and money.

At the time of the policy, your family dynamics may be different. You named your spouse as the beneficiary, and some years later, you got divorced. Or the children you signed are now estranged. For a lot of reasons, people can come together and file for a death benefit dispute.

The case is now sent and handled legally, and only the court will decide who gets the death benefit, not the insurance company. The process will now involve hiring a lawyer, court visits, and spending lots of money on legal fees. The insurance company will either hold the funds until there is an agreement or transfer it to the State to legally distribute to the winning party.

If you find yourself in the middle of the dispute, the best you can do is hire a lawyer or an insurance expert as soon as possible because you will need legal advice on tackling the matter.

Life Insurance Beneficiary vs. Will

What most people are confused about is when it comes to Wills and life insurance beneficiaries. A Will will talk about your asset distribution and other personal matters, but a life insurance policy doesn’t include that. Whoever you name as your beneficiary during the signing of your plan will be given the death payout regardless of whatever is written in the Will.

If you want the life insurance beneficiaries to be updated according to your Will, you will have to do so while you’re still alive. Updating beneficiaries is natural, you need to contact your insurance company and tell them about the new changes, and they will easily handle it for you.

In short, beneficiaries have a more substantial claim, and your Will can’t override it.


If you’re a policyholder and see that your family dynamics have changed from the time you bought the policy and want to change beneficiaries, do so while you’re still alive. The process isn’t complicated, and you can add or remove recipients during the policy.

If you’re a beneficiary and find yourself in the middle of a dispute, try to settle it out of court. And if you’re the one filing the dispute, avoid it from getting legal heat. Matters escalate, and people tend to lose more than gain, including time, energy, and lots of money.

Just make sure you’re on the right side of the spectrum and make sure things are handled smoothly within the parties and the insurance company.

Sandra Johnson

Sandra Johnson

Sandra Johnson was a few years out of school and took a job as a life insurance agent in California, selling coverage door-to-door for Prudential. The experience taught her about the technical components of insurance and its benefits for individuals and society, as well as the misunderstandings people often have about insurance. She has over ten years’ experience in the insurance industry, having worked as both a Broker and Underwriter, assisting clients across a broad range of industries. At Insurance Noon, Sarah diligently gathers all the required information and curates up pieces to provide meaningful insurance solutions. Her personal value proposition is to demonstrate a genuine interest in always adding value for clients.Her determined approach to guiding clients has turned her into a platinum adviser to multiple insurers.