What If Life Insurance Beneficiary Dies? 
When the primary beneficiary predeceases the insured of the life insurance policy , then the contingent beneficiary would receive the proceeds upon the insured 's death -LRB- you can also set up a tertiary beneficiary in the event both the primary and contingent beneficiaries predecease the insured , although this is not usually done on most policies -RRB- . In the event that all beneficiaries die before the insured , then the proceeds would be paid out to the insured 's estate . To avoid the proceeds being paid to the estate , many individuals set up a life insurance trust -LRB- revocable or irrevocable -RRB- to control how the proceeds are distributed and to keep it out of the calculation of the estate . 