If a policy owner names his wife as the primary beneficiary, his children as secondary beneficiaries, and his estate as tertiary, who receives the policy proceeds if the wife predeceases him?

In this scenario, if the policy owner names his wife as the primary beneficiary and she predeceases him, the next group in line to receive the policy proceeds would be the secondary beneficiaries, which are the children.

Beneficiary designations are hierarchical; primary beneficiaries receive the benefits first, followed by secondary (or contingent) beneficiaries if the primary ones are unable to claim the benefit due to death or other reasons. Since the wife, who is the primary beneficiary, has passed away, the policy's terms will direct the proceeds to the next designated group, which are the children. This ensures that the policyholder's intentions for distributing the proceeds are honored, as the children were specifically named as secondary beneficiaries.

The other options, such as the estate or the wife’s heirs, would not receive the proceeds since the policy has designated a clear order for beneficiaries, and the children are next in line after the wife. Therefore, the correct answer is that the children receive the policy proceeds if the wife predeceases the policy owner.