Beneficiaries
There are different kinds of beneficiaries in a life policy. When Alice dies, the death benefit will be paid to Walter. If Walter dies before Alice, the benefit would go to Alexander. Which of the following statements is true?
Alice is the policyholder and Walter is the primary beneficiary. Alexander is the contingent beneficiary. The correct answer is: The primary beneficiary is Walter and Alexander is the contingent beneficiary.
Which of the following is a beneficiary designation based on a group of people with shared characteristics?
The class designation allows all members of a group with a set of common traits to be beneficiaries of a life insurance policy. The correct answer is: Class designation
All of the following options are available if the only logical beneficiary is a minor, EXCEPT:
The guardian, trust and insurance company holding the proceeds are all options if a minor is a beneficiary. The correct answer is: The benefits can go directly to the estate of the insured.
Who are the named individuals or entities the policyowner designates to receive life insurance policy proceeds upon the insured's death?
Beneficiaries are the named individuals or entities designated by the policyowner to receive the policy proceeds upon the insured's death. The correct answer is: Beneficiaries
The Common Disaster Clause:
If the primary beneficiary does not outlive the insured by the number of days specified in the policy's common disaster clause, then the insured's estate receives the death benefit. The correct answer is: Requires the primary beneficiary to outlive the insured by a certain number of days in order to receive the death benefit in a common disaster between the insured and the primary beneficiary
Which beneficiary designation is most appropriate for a person who wants to name his spouse as a beneficiary of his life insurance policy, and simultaneously retain full policy ownership rights?
By naming a beneficiary as irrevocable, that person effectively becomes a co-owner of the policy. In this case, that is not what the policyowner needs. The policyowner should name his spouse as a revocable beneficiary. The correct answer is: Revocable beneficiary
If an irrevocable beneficiary is named on a life insurance policy, all of the following statements are true, EXCEPT:
The policy owner must have the consent of the irrevocable beneficiary to borrow from the cash value. The correct answer is: Policy owners can borrow from cash value without consent.
Mary and Philip are married. Philip named Mary as the primary beneficiary of his life insurance policy. His children from a prior marriage are contingent beneficiaries. Under the Uniform Simultaneous Death Act, who will receive the death benefit if Mary and Philip are in a car accident and there is no evidence of who died first?
Under the Uniform Simultaneous Death Act, the death benefit is paid as if the primary beneficiary died first. If Philip's children predeceased him, then his estate would receive the death benefit. The correct answer is: Philip's children from his prior marriage
The insured and the primary beneficiary are killed in a car accident. Which of the following is true according to the Uniform Simultaneous Death Act?
The Uniform Simultaneous Death Act states that if the insured and the primary beneficiary are in a common accident or died simultaneously, the policy proceeds will be paid as if the primary beneficiary died first, in which case the policy proceeds are paid to the insured's contingent beneficiaries or to the insured's estate. The correct answer is: Policy proceeds are paid as if the primary beneficiary died first.
Which of the following prevents creditors from seizing life insurance policy proceeds as long as there is at least one living named beneficiary, excluding the insured's estate?
The spendthrift clause is used to prevent creditors from seizing life insurance policy proceeds, provided there is at least one named beneficiary, excluding the insured's estate. The correct answer is: Spendthrift clause
