If B were to survive one week longer than A, the answer is that A's insurance would go to B by contract. Then when B dies, B's parents would get B's life insurance by contract and A's death benefit by will or intestacy.

A and B are married and have no children. They each have an individual property life insurance policy naming the other spouse as the primary beneficiary. If the spouse does not survive, then A has named A's parents as secondary beneficiary on A's policy, and B has named B's parents as secondary beneficiary on B's policy. The wills are set up the same way - all to spouse, but if spouse doesn't survive then to parents.