Is a personal insurance payout included in a persons estate?

Dear Michigan, If you received the insurance proceeds, you were likely listed on the insurance policy as the beneficiary. An insurance policy is considered a contract of sorts & if a beneficiary is listed, then that act (naming a beneficiary) removes the proceeds out of the decedent's probate estate. Thus the funds are yours free and clear and legally you are not required to return them.  if on the other hand, no beneficiary is named then the funds belong to the estate. Typically, upon notice of death of the insured, the insurance company contacts the listed beneficiary directly and request they complete required paperwork and upon receipt of the paperwork,the insurance company cuts a check to the beneficiary.  Hope that helps & best wishes to you.