What happens if there is no named beneficiary in an insurance policy?

In cases where an insurance policy does not specify a named beneficiary, the proceeds of the policy typically go to the estate of the insured. This means that upon the death of the insured, the insurance payout is included as part of their estate and is subject to the terms of probate. The executor of the estate will then distribute the funds according to the provisions in the deceased's will or, if there is no will, in accordance with state intestacy laws.

This process is significant as it ensures that the funds are allocated fairly and according to the wishes of the insured, as expressed during their lifetime or according to state guidelines. Therefore, the fact that the proceeds are directed to the estate rather than becoming void or going to family members directly is an important aspect of how insurance policies operate in the absence of a designated beneficiary.