If both the primary and contingent beneficiaries of a life insurance policy have died before the insured's death, who will receive the death benefit?

The correct answer indicates that the tertiary beneficiary will receive the death benefit if both the primary and contingent beneficiaries have passed away before the insured's death. In life insurance policies, a tertiary beneficiary is designated to inherit the benefits only if both higher-priority beneficiaries (primary and contingent) are unable to receive the funds due to their death.

The hierarchy established in life insurance policies prioritizes beneficiaries in such a way that if the primary beneficiary cannot be found or is deceased, the contingent beneficiary will then be considered to receive the death benefit. If that beneficiary also predeceases the insured, the tertiary beneficiary is next in line, ensuring that there is a structure for allocation even in unfortunate circumstances where designated beneficiaries have passed.

Other potential choices would not receive the funds given this specific situation. The insured's heirs might not have rights to the policy proceeds if named beneficiaries exist, while the government typically does not claim death benefits directly unless there are escheat laws in effect concerning unclaimed property. The primary beneficiary cannot receive the benefit because they have died. This structured approach ensures clarity in beneficiary designations and adheres to the insured's wishes as expressed in the policy.