When No Beneficiary Is Named, Who Gets Your Life Insurance?

Who Wins When No Beneficiary Is Listed?

When a life insurance policy lacks a named beneficiary, the insurer follows the state's intestate succession laws. These rules determine who inherits the policy's death benefit, usually prioritizing the policyholder's spouse, children, parents, and then other relatives. If no relatives exist, the benefit may be paid to the state or the insurer's own estate.

Intestate Succession Rules by State

Each state has its own intestate succession hierarchy. For example:

• California: Spouse first, then children, then parents, then siblings, and so on.
• Texas: Spouse and children first; if none, parents, then siblings.
• Florida: Spouse, then children, then parents, then siblings.

If you are unmarried and have no children or parents, the policy may pass to more distant relatives or, rarely, to the insurer's estate.

The Role of the Insurer's Policies

Some insurers include a "survivor clause" that automatically pays the policy to the spouse if no beneficiary is named. Others may require a formal claim from a legal heir. It is essential to read the policy's terms or contact the insurer for specifics.

What Happens to the Funds?

Once the rightful heir is identified, the insurer disburses the benefit. If the heir is a minor, the funds are usually placed in a custodial or trust account until the child reaches the age of majority. If the heir is a corporation, the policy can be assigned to the corporate entity.

Preventing Unintended Transfers

To avoid unintended heirs, name a primary and alternate beneficiary. Review these names annually, especially after major life events like marriage, divorce, or the birth of a child.