Chapter 5 Beneficiaries

Raquel's children from her prior marriage

Only one beneficiary may be named.

Who are the named individuals or entities the policyowner designates to receive life insurance policy proceeds upon the insured's death?

Beneficiaries

Which of the following is a beneficiary designation based on a group of people with shared characteristics?

Class designation

If the primary beneficiary predeceases the insured, the policy proceeds are paid to the ________________ upon the death of the insured

Contingent beneficiary

It is important to specify beneficiary designations very carefully. Taking care when the policy is written will avoid problems later, such as:

Litigation, Confusion, Conflicts

A life insurance policy is a contract between the insurer and the policyowner. After the insured has died, the contractual arrangement is between the insurer and the beneficiary. What responsibilities does the insurer have to the insured's creditors?

None

The Common Disaster Clause:

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?

Revocable beneficiary

Which of the following types of life insurance beneficiary designations should be used to establish a scholarship fund?

Trust

All of the following statements are false regarding the beneficiary designation of a life insurance policy, EXCEPT:

The beneficiary does not need to have an insurable interest in the life of the insured

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?

Philip's children from his prior marriage

If an irrevocable beneficiary is named on a life insurance policy, all of the following statements are true, EXCEPT:

Policy owners can borrow from cash value without consent.

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?

Policy proceeds are paid as if the primary beneficiary died first.

Abel and Raquel are married. Raquel owns a life insurance policy, naming her husband Abel as the primary beneficiary and her children from a prior marriage as contingent beneficiaries. According to the Uniform Simultaneous Death Act, who receives the death benefit if Abel and Raquel are in a car accident and there is no evidence of who died first?

Raquel's children from her prior marriage

Roberta wants to buy a life insurance policy, naming her son Marvin as beneficiary, but she wants to keep all ownership rights under the policy. How should Roberta name Marvin as beneficiary?

Roberta should name Marvin as a revocable beneficiary.

Abigail and Bob have a joint life insurance policy. They name their three children, Simon, Stacey, and Terry as beneficiaries: Simon is primary, Stacey is secondary, and Terry is tertiary. If Abigail and Bob die in a car accident, who will receive the policy proceeds?

Simon

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?

Spendthrift clause

All of the following options are available if the only logical beneficiary is a minor, EXCEPT:

The benefits can go directly to the estate of the insured.

Which of the following statements is not true about a revocable beneficiary on a life insurance policy?

The policyowner cannot change the beneficiary without their knowledge

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?

The primary beneficiary is Walter and Alexander is the contingent beneficiary.