Who has the first claim to the death proceeds of a life insurance policy when the insured dies?

The primary beneficiary has the first claim to the death proceeds of a life insurance policy when the insured dies. This individual is specifically designated by the policyholder to receive the benefits upon the insured's death. The primary beneficiary’s claim takes precedence over all other claims, ensuring that the intended recipient receives the financial support as outlined in the policy.

Designating a primary beneficiary reflects the policyowner's wishes regarding how the death benefit should be distributed, and this designation typically remains in effect unless the policyholder decides to change it. If the primary beneficiary is alive at the time of the insured's death, they will receive the proceeds directly and without the funds passing through the estate or impacting other claims.

Contingent beneficiaries, policyowners, and the estate may have rights to the proceeds but only under specific circumstances, such as when the primary beneficiary is deceased or otherwise unable to claim the funds. The policyowner refers to the person who owns the policy but may not necessarily be the intended recipient of the death benefit. The estate only claims the proceeds if there are no designated beneficiaries or if all beneficiaries have predeceased the insured, which underscores the importance of having a named primary beneficiary.