If a man names his wife as the only beneficiary of his whole life policy and she dies, what happens to the policy proceeds when he dies?

When a policyholder names a specific beneficiary who subsequently passes away before the insured, the designated beneficiary may no longer be eligible to receive the policy proceeds upon the death of the insured. In the scenario described, since the man's wife was the sole beneficiary and she has died, the proceeds from the whole life policy will typically default to the insured's estate. This is due to the principle that, in the absence of a living beneficiary, the benefits are payable to the estate, which is then governed by the terms of the deceased's will or state intestacy laws if no will exists.

The alternatives presented do not account for the loss of the beneficiary. If the firstborn child or both children were to inherit the proceeds, there would need to be a provision in place or a contingent beneficiary named, which is not indicated in the scenario. The insurance company retaining the proceeds would not be the standard procedure in this case, as the proceeds would typically be transferred to the estate for distribution rather than held by the insurer.