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What will happen if Nancy dies but Jack forgot to name another beneficiary?
What will happen if Nancy dies but Jack forgot to name another beneficiary?
How much will Zena's AD&D policy pay after her death from cancer?
How much will Zena's AD&D policy pay after her death from cancer?
What type of beneficiary designation is likely required for Jack to name Nancy as his beneficiary due to their divorce settlement?
What type of beneficiary designation is likely required for Jack to name Nancy as his beneficiary due to their divorce settlement?
How much will the insurer pay for Carla's accident, considering her Life policy and AD&D Rider?
How much will the insurer pay for Carla's accident, considering her Life policy and AD&D Rider?
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Under an AD&D policy, which pays the most, the Capital Sum or the Principal Sum?
Under an AD&D policy, which pays the most, the Capital Sum or the Principal Sum?
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What does a Multiple Indemnity Rider do?
What does a Multiple Indemnity Rider do?
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The Insured wishes to name her daughter as beneficiary for her Life Insurance policy but does not want to give up any ownership rights. What type of beneficiary should she name?
The Insured wishes to name her daughter as beneficiary for her Life Insurance policy but does not want to give up any ownership rights. What type of beneficiary should she name?
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Under which of the following circumstances would an AD&D policy pay a benefit?
Under which of the following circumstances would an AD&D policy pay a benefit?
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Under AD&D Insurance, what does the capital sum represent?
Under AD&D Insurance, what does the capital sum represent?
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Under the Common Disaster Provision, both the Insured and the Beneficiary are presumed to have died at the same time if the Beneficiary dies within what time after the Insured’s death?
Under the Common Disaster Provision, both the Insured and the Beneficiary are presumed to have died at the same time if the Beneficiary dies within what time after the Insured’s death?
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Carl owns a $250,000 Life policy with a Triple Indemnity Rider. While running a marathon, he suffers a fatal heart attack. How much will the Insurer pay?
Carl owns a $250,000 Life policy with a Triple Indemnity Rider. While running a marathon, he suffers a fatal heart attack. How much will the Insurer pay?
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The Simultaneous Death Act applies to the simultaneous death of the Insured and the:
The Simultaneous Death Act applies to the simultaneous death of the Insured and the:
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In order to qualify for AD&D coverage, the accident must directly cause death within how many days?
In order to qualify for AD&D coverage, the accident must directly cause death within how many days?
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Which of the following would NOT be covered by an AD&D policy?
Which of the following would NOT be covered by an AD&D policy?
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An AD&D Rider will cover which of the following?
An AD&D Rider will cover which of the following?
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Which of the following statements regarding an AD&D policy is correct?
Which of the following statements regarding an AD&D policy is correct?
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A Multiple Indemnity Rider is best suited for coverage of which of the following?
A Multiple Indemnity Rider is best suited for coverage of which of the following?
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If Kori’s life insurance policy specifies that her beneficiaries are 'her children,' this is an example of what type of beneficiary designation?
If Kori’s life insurance policy specifies that her beneficiaries are 'her children,' this is an example of what type of beneficiary designation?
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Which of the following will an AD&D policy cover?
Which of the following will an AD&D policy cover?
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What coverage does an AD&D policy provide for blindness resulting from an accident?
What coverage does an AD&D policy provide for blindness resulting from an accident?
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Who gets the death benefit if X dies before Teka, and then Teka dies?
Who gets the death benefit if X dies before Teka, and then Teka dies?
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What is the total death benefit for Jim if he owns a $250,000 Life policy with a $50,000 AD&D Rider and dies from an asthma attack while mountain climbing?
What is the total death benefit for Jim if he owns a $250,000 Life policy with a $50,000 AD&D Rider and dies from an asthma attack while mountain climbing?
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Under the Common Disaster Clause, what happens if Jack and Nancy are killed at the same time?
Under the Common Disaster Clause, what happens if Jack and Nancy are killed at the same time?
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Which of the following statements regarding AD&D Insurance is correct?
Which of the following statements regarding AD&D Insurance is correct?
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Which beneficiary choice restricts the policy owner's flexibility?
Which beneficiary choice restricts the policy owner's flexibility?
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If Helen falls and is injured at a business dinner, which policy will pay?
If Helen falls and is injured at a business dinner, which policy will pay?
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How much will the insurer pay Chad, who owns a $100,000 Life policy with a Double Indemnity Rider, after a fatal accident?
How much will the insurer pay Chad, who owns a $100,000 Life policy with a Double Indemnity Rider, after a fatal accident?
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A contingent beneficiary will receive the death benefit only if?
A contingent beneficiary will receive the death benefit only if?
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What will happen under the Common Disaster Clause if Nancy, the beneficiary, dies after Jack?
What will happen under the Common Disaster Clause if Nancy, the beneficiary, dies after Jack?
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Under the Simultaneous Death Act, what occurs if Nancy and Jack die in an accident?
Under the Simultaneous Death Act, what occurs if Nancy and Jack die in an accident?
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An AD&D policy covers each of these accidents EXCEPT?
An AD&D policy covers each of these accidents EXCEPT?
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What is the purpose of naming a beneficiary in a life insurance policy?
What is the purpose of naming a beneficiary in a life insurance policy?
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If Li wants to change the beneficiary of his policy, which statement is true?
If Li wants to change the beneficiary of his policy, which statement is true?
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What will happen if Nancy and Jack are killed at the same time under the Uniform Simultaneous Death Act?
What will happen if Nancy and Jack are killed at the same time under the Uniform Simultaneous Death Act?
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Study Notes
Life Insurance Beneficiaries & Contingency
- Primary beneficiary: Receives the death benefit if alive when the insured dies.
- Contingent beneficiary: Receives the death benefit only if the primary beneficiary dies before the insured.
- Irrevocable beneficiary: Policy owner cannot change the beneficiary without their consent.
- Revocable beneficiary: Policy owner can change the beneficiary at any time without their consent.
Death Benefits
- Accidental Death and Dismemberment (AD&D) insurance: Provides additional benefits for death or specific dismemberment due to accidents.
- Double Indemnity Rider: Pays double the policy's face amount if the death is accidental.
- Common Disaster Clause: Specifies when the primary beneficiary receives the death benefit if both the insured and the primary beneficiary die at the same time.
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Simultaneous Death Act: State law that presumes the primary beneficiary died first if the insured and primary beneficiary die at the same time.
- Typically requires the primary beneficiary to have survived the insured for a minimum period (e.g., 60 days) to receive the whole death benefit.
Considerations When Choosing a Beneficiary
- Naming a beneficiary: This helps avoid probate and ensures the death benefit goes directly to the beneficiary, free of estate taxes.
- Avoiding potential disputes: A clear and specific beneficiary designation is essential.
- Updating beneficiary information: Ensure beneficiary designations are up-to-date to reflect changes in family circumstances.
Life Insurance Policy Beneficiaries
- If the primary beneficiary dies before the policy holder, the policy proceeds are paid to the policy holder's estate, unless a contingent beneficiary has been named.
Accidental Death and Dismemberment (AD&D) Insurance
- If the death is caused by an illness and not an accident, the AD&D policy will not pay.
- The capital sum is paid for the loss of a primary body part due to an accident, and is equal to half of the policy's face value.
- The principal sum is paid for the full face value of the AD&D policy if the insured dies due to an accident.
Irrevocable Beneficiary Designation
- Irrevocable beneficiary designation is where the policy holder cannot change the beneficiary without consent from the beneficiary.
Life Insurance Triple Indemnity Rider
- A triple indemnity rider pays three times the face amount of the policy if the insured dies due to an accident.
Common Disaster Provision
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If the insured and beneficiary die within 60 days of each other, it is presumed they died at the same time.### Life Insurance Policy Face Value
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The insurer will pay $250,000 to the beneficiary because the insured died of natural causes.
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The Triple Indemnity Rider would have paid $750,000 if the cause of death was an accident.
Simultaneous Death Act
- The Simultaneous Death Act addresses the simultaneous death of the insured and the beneficiary.
- It clarifies inheritance in such cases.
Accidental Death & Dismemberment (AD&D) Coverage
- AD&D coverage requires death to occur within 90 days of an accident.
- AD&D policies do not cover lost income for the beneficiary.
AD&D Coverage Examples
- Death on a regularly scheduled flight is an example of an event covered under AD&D.
- Accidental death caused by a sudden heart attack is not covered under AD&D.
Multiple Indemnity Rider
- The purpose of a Multiple Indemnity Rider is to increase the death benefit if the death occurs due to an accident.
Beneficiary Designation
- A revocable beneficiary allows the policy owner to retain full ownership rights and change beneficiaries at any time.
- This ensures the owner’s control over the life insurance policy.
Irrevocable Beneficiary
- An irrevocable beneficiary gives up the right to change beneficiaries.
- Changing beneficiaries is an ownership right.
Accidental Death and Dismemberment (AD&D) Policies
- Will pay a benefit for accidental death or dismemberment.
- Death must occur within 90 days of the accident.
- Death cannot be caused by illness.
- It will not cover death from a stroke.
- Loss of use of legs is not a dismemberment.
- Will cover blindness from an accident like a barbecue incident.
AD&D Policy Statements
- An AD&D policy pays a death benefit when death is the result of an accident.
- An AD&D policy requires an insured to name a beneficiary.
- Dismemberment benefits are not paid in monthly payments.
- An AD&D policy will pay the capital sum (not principal sum) in case of accidental death.
Multiple Indemnity Rider
- Covers accidental death, not accidental dismemberment.
Beneficiary Designation
- Beneficiaries can be individually named.
- Beneficiaries can be designated by class like "my children."
- Designating by class can cause issues if there are children from previous marriages.
- If a life insurance policy names "her children" as beneficiaries, this is an example of a class beneficiary.
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Description
Test your knowledge on types of life insurance beneficiaries, including primary, contingent, irrevocable, and revocable. Explore concepts related to death benefits, such as accidental death coverage and clauses impacting policy payouts. This quiz is ideal for anyone looking to deepen their understanding of life insurance fundamentals.
