Under the New York Rule, if a primary beneficiary dies, where does the share go?

• A. To the insured's estate
• B. To surviving class beneficiaries
• C. To the insured's personal representative
• D. To the state

Answer: (B)

In the New York Rule, when a primary beneficiary dies before the insured, the share designated for that beneficiary goes to the remaining surviving beneficiaries within the same beneficiary class. This keeps the proceeds within the intended group (the class) rather than passing to the insured’s estate or escheating to the state. For example, if the policy says it’s for the insured’s children and one child dies before the insured, that child’s portion is divided among the surviving children. Only if there are no surviving beneficiaries in that class (and no contingent beneficiaries) would the funds then follow other policy terms, potentially toward the estate.