Question 95

A minor must have an appointed guardian to receive proceeds from a death benefit.

In order for a minor to receive death benefit proceeds, it is necessary for them to have an appointed guardian who can manage the funds until the minor reaches legal adulthood. This ensures that the funds are handled responsibly and in the best interest of the minor.

A) must be related to the insured.

This option is incorrect because a minor does not need to be related to the insured in order to receive death benefits. Beneficiaries can be chosen regardless of their relationship to the insured, so this requirement does not apply.

B) can only be named as a contingent beneficiary.

This statement is incorrect as well. While minors can indeed be named as contingent beneficiaries, this does not restrict them solely to that role. They can also be designated as primary beneficiaries, provided there is a guardian in place to manage the funds.

C) must be at least 16 years old.

This option is misleading. There is no specific age requirement that mandates a minor to be at least 16 years old to receive death benefits. The critical factor is the appointment of a guardian, not the age of the minor.

D) must have an appointed guardian.

This is the correct option. A minor must have a legal guardian appointed to receive death benefit proceeds, ensuring that the funds are administered properly until the minor becomes an adult. This requirement protects the interests of the minor.

Conclusion

The necessity for a minor to have an appointed guardian is crucial for the responsible management of death benefit proceeds. Options A, B, and C fail to address the legal mechanisms required for a minor to access such funds, making D the only accurate choice. Proper guardianship ensures that minors are protected and that their financial interests are safeguarded.