Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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Andy is the insured, his wife Melissa is the primary beneficiary, and Andy’s children from a previous marriage are his contingent beneficiaries. Melissa also has a policy naming Andy as the primary and their daughter as the contingent. If Andy and Melissa are killed in a plane wreck, but evidence shows that Melissa died after Andy, who receives the payments from the insurance policies?
  1. Andy and Melissa’s daughter
  2. Andy’s children from his previous marriage
  3. All of the children will receive payments equally
  4. Andy’s children will receive his policy payments and Melissa’s daughter receives payments from her policy.
Explanation
Answer: A - If evidence shows that Melissa outlived Andy for any length of time, the chain would be Melissa receiving payments from Andy’s policy, and then their daughter receiving payments from Melissa’s policy which would include the payments from Andy’s policy. Although Andy has contingent beneficiaries, Melissa outliving him for any time establishes her place in the payments chain, and then enacts her policy upon her death.
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