When you purchase a life insurance policy, you can name a beneficiary. A beneficiary is a person or persons who will receive the death benefit from your life insurance policy when you die. If you die without naming anyone, the money will go to your estate (the sum of all your property, possessions, financial assets, and debts) by default. When you name a beneficiary, the money does not go to your estate but directly to the beneficiary.
Easy answer provided by FSCO (Financial Services Commission of Ontario)