84. When beneficiaries are designated "per capita" in a life insurance policy, it means
Answer: B
Beneficiaries designated "per capita" must divide their share among any heirs of beneficiaries who predecease the insured.
When beneficiaries are designated "per capita," it indicates that the surviving beneficiaries will share the death benefits in a manner that accounts for any deceased beneficiaries, requiring them to divide their share among the heirs of those beneficiaries.
A) The policyowner cannot revoke the class designation.
This statement is incorrect, as a policyowner retains the right to change or revoke beneficiary designations, including class designations, unless otherwise restricted by the terms of the policy or applicable law.
B) Surviving beneficiaries must divide their share of the death benefits among any heirs of beneficiaries who predecease the insured.
This option accurately describes the "per capita" designation. It clarifies that if a beneficiary passes away before the insured, their share of the benefits will be allocated to their heirs instead of being redistributed among the remaining beneficiaries.
C) The policyowner cannot designate minor children as beneficiaries.
This statement is misleading; while there may be legal considerations regarding the designation of minor children as beneficiaries, it is not universally true that a policyowner cannot name them. Policies typically allow this, but some may require a custodian for the minor's benefit.
D) Surviving beneficiaries must share equally in the death benefits regardless of heirs of beneficiaries who predecease the insured.
This statement is incorrect, as it misrepresents the "per capita" designation. Under "per capita," the share of a deceased beneficiary does not simply get reallocated equally among the surviving beneficiaries; instead, it goes to the heirs of the deceased beneficiary.
Conclusion
The correct understanding of "per capita" designations is crucial for accurate distribution of life insurance benefits. Option B succinctly captures this concept, while the other options either misrepresent the rules surrounding beneficiary designations or fail to address the distribution mechanics involved. Thus, B stands out as the definitive correct answer.