Question 8

Policy proceeds are paid to the named living primary beneficiaries.

At the time of an insured's death, a per capita distribution of policy proceeds is directed to the named living primary beneficiaries, ensuring that those directly specified in the policy receive the benefits.

A) the estate of the deceased beneficiaries

This option is incorrect because the proceeds are not paid to the estate of deceased beneficiaries under a per capita distribution. Instead, the focus is on the living primary beneficiaries designated in the policy.

B) the primary beneficiary's children if the primary has predeceased the insured

This choice is not correct in the context of a per capita distribution. While contingent or secondary beneficiaries may receive benefits if primary beneficiaries are deceased, the question specifically pertains to distribution at the time of the insured's death, directing proceeds to the living primary beneficiaries.

C) all the primary and contingent beneficiaries in equal installments

This option misinterprets the per capita distribution. Per capita typically refers to benefits being allocated to the named living primary beneficiaries only, rather than distributing among both primary and contingent beneficiaries equally.

D) the named living primary beneficiaries

This is the correct option as the per capita distribution of policy proceeds is explicitly designated for the named living primary beneficiaries. They are the direct recipients of the insurance proceeds as per the terms of the policy, highlighting the importance of clearly defined beneficiaries.

Conclusion

The correct answer is D, as it accurately reflects the mechanism of distributing policy proceeds to the named living primary beneficiaries at the time of the insured's death. Other options fail to align with the per capita principle, which emphasizes direct allocation to those beneficiaries explicitly listed in the policy while excluding deceased beneficiaries and estates.