What happens if the life insurance beneficiary dies?


The beneficiary of life insurance is the person who will receive the agreed compensation in the event of the death of the insured. However, it may happen that said beneficiary dies before the insured person. What happens then? What happens if the beneficiary of life insurance dies? Who has the right in such a case to collect compensation? To answer these questions, it is necessary to know in advance who are the people involved in a life insurance contract.

Who is involved in life insurance?

The following people are involved in life insurance:

  • The insurance company. Although it is not a natural person per se, it is the legal entity that provides the policy and guarantees the coverage contracted in it.
  • The policyholder. He is the one who subscribes and signs the policy, assuming by doing so the payment of the agreed premiums. It can be a natural or legal person.
  • The insured. It is the person exposed to the risk covered by the policy. It may or may not coincide with the policyholder.
  • The beneficiary. It is the person designated in the policy to receive the compensation agreed in the insurance. It can be determined expressly (with name and surname) or generic (for example, spouse, children, nephews, etc.). On the other hand, there may be a single beneficiary or several, but they must always be natural persons since legal persons cannot be beneficiaries of life insurance.

Who collects in case the beneficiary of life insurance dies?

If the life insurance beneficiary dies, the policyholder can name a new one to succeed the deceased. This designation is not mandatory, although it is highly recommended, especially if there are no other designated beneficiaries along with the deceased.

It may happen, however, that the insured and the beneficiary die at the same time (for example, as a result of an accident). In such a case, if there are no more designated beneficiaries, the capital to be received would be incorporated into the assets of the insured person. This would mean that said capital would be collected by the legal heirs of the insured, not those of the beneficiary. Such legal heirs of the insured would then have to initiate the necessary procedures to claim compensation from the insurer.

Who covers life insurance when no beneficiary has been designated?

Normally, when contracting life insurance, the policyholder establishes at least one beneficiary, either expressly or generically. However, he is not required to do so. In other words, the policyholder can perfectly subscribe to life insurance without indicating a beneficiary. The question then arises as to who collects the compensation in such a case if the death of the insured occurs.

Well, in the event that the insured dies without the policyholder having indicated a beneficiary, current laws establish that it will be the policyholder himself who collects the compensation set. And in the event that the policyholder and the insured were the same people, the capital would be incorporated into the inheritance for distribution among their legal heirs.

How is the capital of life insurance distributed when there are several designated beneficiaries?

In the event that several beneficiaries are included in a life insurance policy, the distribution of compensation among them will be carried out in the manner specified by the policyholder. If this did not set anything in this regard, the distribution would be made in equal parts among all the indicated beneficiaries.

However, if the designation had been made generically in favor of the insured’s heirs, the distribution among them would not be in equal parts, but rather each one of them will receive their share of compensation in proportion to the inheritance share that they receive. Correspond.

Recommendations to take into account to designate the beneficiaries of life insurance

If you plan to take out a face value life insurance policy, we advise you to consider the following tips:

  • It is advisable to designate more than one beneficiary. Keep in mind that if you only name a beneficiary, this could predecease the insured himself. Do not forget either that while the policy is in force, you can change the beneficiary or include additional ones.
  • If you decide to add several people as beneficiaries to your life insurance, it is advisable to detail the percentage of compensation that each of them will receive.
  • Always inform the beneficiary or beneficiaries of the existence of the policy and all its details. This will make it easier for them when the time comes to claim compensation.