No, you do not have to disclose this to anyone. So for example, if your sister left an estate to be divided among beneficiaries/heirs, any life insurance paid out to you, passes outside of that estate. This means that you will collect all proceeds as the sole benficiary (plus you may also be a beneficiary/heir of the estate). Bottom line, to repeat, your inheritance of the life insurance proceeds is your business. You will just need to submit a copy of her death certificate (and possibly other documents as requested) by the life insurance company.