What Happens To Life Insurance When Both Parents Die? 
The beneficiaries of a life insurance policy pay in a certain order . First is the primary beneficiary which can be a person , a few people paid by percentage , or an institution , such as to repay a loan . Second is the contingent beneficiary . The contingent beneficiary is paid if the primary benefit dies before or with the insured . Third is the tertiary beneficiary . This beneficiary receives life insurance proceeds if all of the primary and contingent beneficiaries die before or with the insured . If the later beneficiaries are not named on the policy , then life insurance proceeds roll into the estate and will be subject to probate and estate taxes . This is always as shame as life insurance proceeds are usually not taxed if there is a named beneficiary . Be sure and work with a knowledgeable agent or advisor to be sure your life insurance policy is set up correctly . 