Primary vs Contingent Beneficiary

Predeceased the insured, so the proceeds pass to the contingent beneficiary — A common disaster provision establishes an order of death when the insured and beneficiary die together. Unless the policy states otherwise, the beneficiary is presumed to have died first, so the proceeds are paid to the contingent beneficiary. This prevents the proceeds from flowing to the beneficiary's estate (and possibly to unintended heirs or creditors) when the order of death is unknowable.

National insurance concept

The beneficiary is presumed to have predeceased the insured, so the proceeds pass as if the beneficiary died first. — The common disaster clause, often called the simultaneous death provision, addresses the situation where the insured and the primary beneficiary die in the same accident or under circumstances where the order of death is unknown. It presumes that the beneficiary died first, so the death benefit is paid to the contingent beneficiary or, if none, to the insured's estate. This avoids the proceeds being dragged through the beneficiary's estate and taxed twice, and it lets the policyowner's intended plan for distribution control who receives the money.

National insurance concept