Does a life insurance policy payable to the "next of kin" supercede a Will?

Without reviewing the entire sitaution and documents no definitive answer can be given.  If grandfather survived and was named beneficiary of the life insurance then the proceeds are an asset of his estate and should be controlled by the will.  However, without looking at the policy, it is hard to say as the company may be looking at contingent beneficiaries.  If they do not know that he survived the insured, then they are giving wrong advice.  Hire an estates attorney to get the assistance you need.

This is really not an easy question to give guidance on here.  Technically if your grandfather died after your grandmother the insurance policy should have gone to him upon her death.  SInce he was alive when she diedI think that it "vested"in himand would then go to his estate upon his death.  That would make it distributable through his Will. It sounds as if the insurance policy is teating it differently and as if he pre-deceased her.  But even so then most policies state it goes to the estate of the policy holder. I would have an attorney inquire here.  To protect your interests have the executor send a certified letter to the insurance company and let them know that the estate is claiming the funds and that you wish them to"interplead" the funds into court. Good luck.