Legal Question in Wills and Trusts in California

If the insurance policy has a valid beneficiary designation, the proceeds are not subject to the terms of the trust.

You are really talking about apples and oranges. An insurance policy has its' own designated beneficiaries. The proceeds are distributed to the beneficiary and this is also not subject to Probate. The only exceptions are: (a) if the trust is named as the beneficiary of the insurance, then the proceeds go to the Trust; or, (b) if the beneficiaries have died and so there is no designated beneficiary, In that case, the policy proceeds might be subject to Probate in California if they exceed $150,000.