Chapter 7

Which of the following statements is CORRECT?

A per stirpes distribution means that a beneficiary's share of a policy's proceeds will be passed down to his or her living child or children if the named beneficiary predeceases the insured.

Kevin, the insured under a $200,000 life insurance policy, and his sole beneficiary, Lynda, are killed instantly in a car accident. Under the Uniform Simultaneous Death Act, to whose estate will the policy proceeds be paid?

Kevin's estate

Mary names her husband, Rick, as primary beneficiary of her life insurance policy and her two children, Pam and Matt, as contingent beneficiaries. Rick dies in March. Pam and Matt are killed simultaneously in a car accident later that month. Hearing the news, Mary has a fatal heart attack. In this case, Mary's life insurance will be paid

Mary's estate

With an irrevocable beneficiary named, a policy owner may do which of the following without the beneficiary's permission?

change the premium mode

The beneficiary on Walter`s life insurance reads, "Children of the Insured." Which of the following phrases best describes this type of beneficiary designation?

class beneficiaries

Christine's policy has a clause that reads as follows, "Should the primary beneficiary and the insured die in the same accident and the primary beneficiary fails to survive the insured by 14 days, it will be assumed that the beneficiary predeceased the insured." Which of the following phrases best describes this clause?

common disaster provision

When a policy owner cannot exercise his rights of ownership without the policy beneficiary's consent, the beneficiary is designated

irrevocable

What is the beneficiary designation that can only be changed with the beneficiary's written agreement?

irrevocable beneficiary

All of the following statements about beneficiary designations are correct EXCEPT

minors cannot be named life insurance beneficiaries

Mr. Williams names his son John a beneficiary of his life insurance policy. What designation should he use if he wants to make sure that John's children would receive John's share of the life insurance policy proceeds should John predecease his father?

per stripes

If an irrevocable beneficiary dies before the policy owner, who of the following gains control of a life insurance policy with a reversionary irrevocable clause?

policy owner

The method used today to change beneficiaries is known as the

recording method

A clause that states that policy distributions payable to the beneficiary after the insured dies are not assignable or transferable and may not be attached in any way is called a

spendthrift trust clause

Sandra has a life insurance policy that states that her husband, Gerald, is to receive the full death benefit. If he predeceases her, their three children are to share the benefit equally. If her husband and all three children predecease her, the benefit is payable to the First Community Church. All of the following statements are correct EXCEPT

the designation of the First Community Church can be contested by any of Sandra's relatives who survive the children

All of the following statements concerning a common disaster provision are correct EXCEPT

the provision stipulates that if the primary beneficiary outlives the insured by more than 48 hours, then the proceeds will be paid to the primary beneficiary's estate

All of the following statements about facility of payment provisions are correct EXCEPT

they are often found in group life policies