If the owner of a life insurance policy dies and the insured is still alive but the policy hasn't matured, if the insured wanted to cash out will he/she only be getting the cash out value? 
If the policyowner dies before the insured , the ownership would go to the contingent owner -LRB- if one was desginated -RRB- . If no contingent owner was designated , the policy ownership would then go into the estate and become an asset to the estate - from there it will have to go through the probate process . The Will -LRB- if one was left -RRB- would then designate who gets the asset . If the policyowner dies intestate -LRB- meaning they did not have a will -RRB- , a judge would have to sign off on who gets the asset -LRB- the insurance policy in this case -RRB- . Once new ownership has been established , the owner would then have the option to keep the policy going or cash it out -LRB- if applicable - term insurance does not build cash value , permanent insurance policies do -RRB- . If cashed out , the amount received would be the cash value less any applicable surrender charges , outstanding loan balances , or interest on the loans . The insured does not have the ability to cash out the policy unless they were the policyowner . 