Question 81

All children of the insured is an example of a beneficiary designation by class.

A beneficiary designation by class refers to a situation where a group of individuals is identified as beneficiaries based on a shared characteristic, rather than naming specific individuals. In this case, "all children of the insured" clearly defines a class of beneficiaries.

A) All children of the insured

This option is correct because it specifies a group—children—who will collectively receive benefits without naming any individual child. This aligns perfectly with the definition of a class beneficiary designation.

B) A specified parent of the insured

This option is incorrect as it names a specific individual (a parent) rather than a class of beneficiaries. A beneficiary designation that specifies an individual does not meet the criteria for a class designation.

C) A named shareholder of a corporation

This option is also incorrect because it identifies a specific individual (the shareholder) rather than a class of individuals. Class designations involve groups, while this option refers to a single person.

D) The estate of the insured

This option is incorrect as well. While the estate can be a beneficiary, it does not represent a class of individuals. Instead, it refers to the total assets of the insured, which is not a classification of people.

Conclusion

The choice "all children of the insured" is definitively correct as it exemplifies a beneficiary designation by class, encompassing all children without naming them individually. In contrast, the other options fail to meet this criteria, as they either specify individuals or refer to entities rather than a collective group. This distinction is crucial in understanding beneficiary designations.