What happens to life insurance if no beneficiary is named in Ontario?

If no beneficiary is named, or none of the named beneficiaries is alive, the insurance money is payable to the insured's personal representative and becomes part of the estate. Naming the insured's 'heirs', 'next of kin' or 'estate' has the same effect, because the law treats it as naming the personal representative.

Once in the estate, the money is dealt with under the will or the intestacy rules, together with estate debts. The creditor shield in the Insurance Act applies only where a beneficiary is designated, and in that case the money is not part of the estate or subject to the insured's creditors. Estate administration tax is charged on the value of the estate when probate is issued.

Even a designated beneficiary can be reached by a dependant support claim, because a court setting support adds life insurance the deceased owned back to the net estate. Check the policy and any declarations carefully, since a designation can be made in the contract or in a separate declaration. A lawyer can confirm what applies to your situation.