Doesn't sound right-you need to have an attorney review the situation and advise you what to do next.
The insurance company should issue separate checks to each named beneficiary.
The answer given does not imply that an attorney-client relationship has been established and your best course of action is to have legal representation in this matter.
If the proceeds have already been distributed, you're probably out of luck. However, if you believe that the payment was improper you need to consult an attorney who can sort out the facts and determine if the payment was proper. The longer you wait to do that, the less likely there will be the recovery you seek. Asking questions here does not get you any further toward resolution. Good luck.
I am licensed in California only and my answers and information on Avvo assume California law. Answers and information provided by me is general information only. It is not legal advice. It must not be relied upon by you. Legal advice must be based on the interplay between specific facts and the law. This forum does not allow for the discussion of that interplay. I provide legal advice during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us. The communications on this website between us are not privileged or confidential. All legal proceedings involve deadlines and time limiting statutes. So that you do not lose any legal rights for failure to timely take appropriate action for your situation, you should promptly and personally consult with an attorney for legal advice.
You have a complex and unusual situation. You cannot get an answer here, because someone needs to review all of the facts of the situation with you and determine what took place. Timing makes a big difference in cases like this, and it is not clear from your summary what took place. If the primary beneficiary survived the decedent, then the contingent beneficiary is not entitled to anything. The fact that the insurance was not collected before the death of the primary beneficiary would not change this. If the primary beneficiary predeceased the decedent, then that is a completely different situation, and the answer would be completely different, as well. Given the apparent passage of time and the apparent payout to the beneficiary, you may have a tough time pursuing this, even if you otherwise might have had a right to at one time. You need to check with an attorney to be sure, however.
*** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.