Pennsylvania Life and Health Insurance Exam Practice Question
An insured named her four children as beneficiaries in equal shares to her $60,000 life insurance policy. Her eldest child has two children and dies prior to the insured. The other three children do not have children of their own. If the insured designated the beneficiaries per capita, how will the proceeds be distributed?
Correct Answer: A
Rationale: In this scenario, the life insurance policy designates beneficiaries per capita, meaning each living beneficiary receives an equal share of the total amount. With the eldest child deceased, the remaining three children will share the $60,000 equally, resulting in each receiving $20,000.
Option B is incorrect because it suggests that $15,000 would go to the estate, which contradicts the per capita designation. Option C miscalculates the distribution, failing to account for the total amount available to the three surviving children. Option D incorrectly includes the grandchildren as beneficiaries, which is not applicable under a per capita designation that only considers living beneficiaries.
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