#1
Who can be named as a beneficiary on a life insurance policy?
Anyone the policyholder chooses
ExplanationPolicyholder has discretion over selection.
#2
What is the primary purpose of a beneficiary designation?
To specify how the policy proceeds should be distributed
ExplanationDirects distribution of policy proceeds.
#3
What happens if a life insurance policyholder doesn't designate a beneficiary?
The proceeds go to the estate and are subject to probate
ExplanationProceeds follow estate laws, subject to probate.
#4
Can a life insurance beneficiary designation override a will?
Yes, beneficiary designations always override a will
ExplanationBeneficiary designations supersede will directives.
#5
What is a contingent beneficiary?
A beneficiary who receives the policy proceeds if the primary beneficiary is deceased
ExplanationSecondary recipient if primary beneficiary is deceased.
#6
What happens if a beneficiary predeceases the policyholder?
The proceeds are distributed among the remaining beneficiaries
ExplanationProceeds divided among surviving beneficiaries.
#7
Can a minor be named as a beneficiary?
Yes, but only if a legal guardian is appointed
ExplanationMinors eligible with legal guardian appointment.
#8
What is the advantage of naming multiple beneficiaries?
It allows for flexibility in case a beneficiary predeceases the policyholder
ExplanationFlexibility in case of beneficiary's death.
#9
What is the advantage of naming a trust as the beneficiary of a life insurance policy?
It avoids probate and provides more control over how the proceeds are distributed
ExplanationAvoids probate, grants control over distribution.
#10
What is the 'revocable' designation in beneficiary designations?
The beneficiary designation can be changed without consent from the previous beneficiary
ExplanationDesignation changeable without previous beneficiary's consent.
#11
Can a life insurance policyholder designate their business as a beneficiary?
Yes, but only if the policyholder is a major shareholder
ExplanationBusiness designation requires policyholder as major shareholder.
#12
In what circumstances might a policyholder want to change their beneficiary designation?
All of the above
ExplanationVarious life events may prompt beneficiary changes.
#13
What is the difference between a revocable and irrevocable beneficiary designation?
Revocable designation can be changed by the policyholder at any time, while irrevocable designation cannot be changed without the consent of the beneficiary
ExplanationRevocable changeable anytime; irrevocable needs beneficiary consent.
#14
What is a per stirpes beneficiary designation?
The proceeds are distributed according to the shares of the deceased beneficiary's descendants
ExplanationProceeds divided among descendants' shares.