what happens to life insurance with no beneficiary

When a happens to life insurance with no beneficiary, the death benefit typically goes to the insured’s estate. This can lead to probate, potentially delaying the distribution of funds and incurring additional costs. The proceeds may be used to pay off debts before any remaining amount is distributed according to the will or state law. It’s important to designate a beneficiary to avoid these complications.

happens to life insurance with no beneficiary

happens to life insurance with no beneficiary

When a life insurance policyholder dies without naming a beneficiary, the policy proceeds typically become part of the deceased’s estate.

This means the death benefit will be distributed according to the terms of the deceased’s will or, if there is no will, according to the state’s intestacy laws.

This process can often be lengthy and may subject the insurance payout to estate taxes and creditors’ claims, potentially reducing the amount that ultimately goes to the deceased’s heirs.

To avoid such complications and ensure that the intended recipients receive the full benefit promptly, it’s crucial for policyholders to designate and regularly update their beneficiaries.

happens to life insurance with no beneficiary

( 2 )

Leave a Comment