If the murderer can't collect his victim's life insurance does his step-brother?
The law is absolutely clear that a murderer can not collect life insurance on the life of his or her victim. However, that does not mean that the life insurance company then should be the effective beneficiary of the murder victim, and not have to pay out the proceeds.
Here the proceeds seem to have been escheated -- paid to the state of California -- the state in which the deceased lived.
If the deceased left a Will, the proceeds would normally go to her heirs at law under Section 6400 and its following sections, which sets out California's laws of intestate succession, and would provide for the funds to go to her spouse, any remaining children (including adopted children), her parents or their descendants, the grandparents and their descendants, and the relatives as set out in the various sections.
While California does not provide a general the right of inheritance by way of intestate succession to step-children there is one important exception that is designed to reflect the modern American family in Section 6454 of California's Probate Code: "for the purpose of determining intestate succession by a person or the person’s issue from or through a foster parent or stepparent, the relationship of parent and child exists between that person and the person’s foster parent or stepparent if both of the following requirements are satisfied:
(a) The relationship began during the person’s minority and continued throughout the joint lifetimes of the person and the person’s foster parent or stepparent.
(b) It is established by clear and convincing evidence that the foster parent or stepparent would have adopted the person but for a legal barrier."
So if you, came into the family as a minor, and maintained an ongoing relationship with your step-mother, and can show that you would have been adopted (say except for the fact that your natural mother wouldn't permit it) you would have a claim.