If no beneficiary is assigned, who becomes the beneficiary?

• A. Life insured's estate becomes the beneficiary
• B. The insurer selects
• C. A default contingent beneficiary
• D. The policy lapses

Answer: (A)

When no beneficiary is named on a life policy, the death benefit goes to the insured’s estate. This happens because the contract needs a recipient, and without a named beneficiary, the proceeds are treated as part of the estate to be distributed according to the will or the provincial rules of intestacy. The insurer does not pick someone else by default, and there isn’t a built-in default beneficiary beyond the estate. This can mean probate delays and that the proceeds may be used to pay debts and taxes before distribution. To ensure the funds go to a desired recipient outside of probate, it’s important to designate a beneficiary.