30. If the primary beneficiary is NOT alive at the time of the Insured's death, to which beneficiary will the proceeds be paid?
Answer: D
The proceeds will be paid to the Contingent beneficiary if the primary beneficiary is not alive at the time of the Insured's death.
If the primary beneficiary is deceased when the insured passes away, the life insurance proceeds will be directed to the contingent beneficiary, assuming one has been named in the policy.
A) IRS
The IRS is not a beneficiary of life insurance proceeds. The proceeds are not paid to the Internal Revenue Service unless there are tax implications, which does not apply in this scenario. Therefore, this option is incorrect.
B) Insurer
The insurer does not receive the proceeds of the policy upon the death of the insured. The insurer is obligated to pay the designated beneficiaries, so this option is also incorrect.
C) State
The state is not entitled to the proceeds unless there are no living beneficiaries and the death benefits are considered unclaimed property. In this case, the proceeds are directed to the contingent beneficiary, making this option incorrect.
D) Contingent
The contingent beneficiary is the correct recipient of the proceeds if the primary beneficiary is not alive at the time of the insured’s death. This option accurately reflects the standard practice in life insurance beneficiary designations.
Conclusion
The contingent beneficiary is the proper recipient of the life insurance proceeds in the event that the primary beneficiary has passed away. The other options fail to accurately represent the distribution of proceeds according to typical life insurance beneficiary hierarchy, confirming that D is the definitive correct answer.