Who ultimately receives the proceeds from a whole life policy when the original beneficiary has died?

The proceeds from a whole life insurance policy typically go to the insured's estate if the original beneficiary has died and there is no contingent beneficiary named. This is because the death benefit is considered part of the deceased's estate, which will be distributed according to the policies laid out in their will or according to state probate laws if no will exists.

In this situation, if the original beneficiary cannot receive the funds—due to their passing—the insurance company will distribute the proceeds to the estate. This will allow for the funds to eventually be passed on according to the wishes of the insured, whether that be to family members, friends, or other designated heirs as outlined in the estate planning documents.

Understanding this mechanism helps in comprehensively grasping the importance of designating both primary and contingent beneficiaries in an insurance policy, as it ensures that the proceeds are passed directly to the intended recipients without going through the estate process, which can be lengthy and subject to creditor claims.