68. The insured and primary beneficiary were in a car accident. The insured was killed instantly; the beneficiary died 10 days later. Which provision protects the rights of the contingent beneficiary?
Answer: B
The common disaster clause protects the rights of the contingent beneficiary.
In situations where both the insured and the primary beneficiary die under circumstances that may affect the distribution of benefits, the common disaster clause ensures that the contingent beneficiary receives the benefits if the primary beneficiary does not survive the insured by a specified period.
A) Entire contract
The entire contract provision refers to the insurance policy as a complete agreement between the insurer and the insured. While it includes all terms and conditions, it does not specifically address the sequence of deaths or the rights of contingent beneficiaries in cases of simultaneous or near-simultaneous deaths.
B) Common disaster clause
The common disaster clause is specifically designed to protect the rights of contingent beneficiaries when both the insured and the primary beneficiary die in a disaster. This clause typically stipulates that if the primary beneficiary does not survive the insured by a certain period (such as 30 days), the benefits will go to the contingent beneficiary, making this option the correct one.
C) Consideration clause
The consideration clause outlines the payment of premiums in exchange for coverage provided by the insurer. It does not relate to the death sequence of the insured and beneficiary and therefore does not provide any protection for the contingent beneficiary in this situation.
D) Insuring clause
The insuring clause specifies the coverage provided by the policy and the conditions under which the insurer will pay out benefits. However, it does not address the specific rights of beneficiaries in cases where the primary beneficiary dies shortly after the insured, making it an inadequate choice for protecting contingent beneficiaries.
Conclusion
The common disaster clause is essential for ensuring that contingent beneficiaries receive benefits when both the insured and primary beneficiary die in close succession. Other options, such as the entire contract, consideration clause, and insuring clause, do not address the critical issue of beneficiary rights under such circumstances, confirming that B is the correct choice.