What happens if one primary beneficiary dies before the policy owner in Ontario?

It depends on how the policy or plan is worded and whether a contingent beneficiary was named, so the answer is not the same for every account. The first step is to ask the insurer or financial institution for a copy of the designation. Read the exact wording before you assume the share goes to the other beneficiaries, a contingent beneficiary or the estate.

An insured may name who receives life insurance money in the contract or by a declaration, and a designation of 'heirs' or 'estate' is treated as naming the insured's personal representative. An irrevocable designation cannot be changed without the beneficiary's consent. If the designation leaves real doubt about who should be paid, an insurer that admits liability may apply to court to pay the money into court. That application can be made after more than 30 days from when the money became payable.

Wills follow a separate rule. A gift to a child, grandchild, brother or sister who dies first and leaves a spouse or issue does not lapse unless the will shows a contrary intention. That rule is about gifts in a will, so do not assume it decides an insurance or RRSP designation. A lawyer can read the documents and confirm.