Ans: Suppose you fail to name a beneficiary or beneficiaries. In that case, the decision about what happens to your money will be made by someone else, such as your financial institution or the state court where you lived. If there isn't a designated beneficiary, your estate receives the proceeds of your life insurance policy. The life insurance proceeds are divided appropriately, along with the rest of your assets. Your estate could need to go through probate, which often carries high costs and could delay the beneficiary's inheritance for a long time.