New York State Life Insurance Exam Questions Practice Question
Rob, Joe, and Mike are brothers who have a $60,000 "first-to-die" joint life policy covering all three of their lives. If Joe dies first, the policy proceeds
Correct Answer: A
Rationale: In a "first-to-die" joint life policy, the insurance payout occurs upon the death of the first insured individual. Once Joe passes away, the policy terminates, and no further insurance protection is available for Rob and Mike.
Option B is incorrect because the payout does not go to Joe's wife; it goes to the beneficiary specified in the policy, which may not be her.
Option C is misleading as the policy does not accumulate interest; it simply pays out upon the first death.
Option D is also incorrect; while Joe's estate may be involved in the distribution of funds, the policy proceeds are paid directly to the designated beneficiary, not automatically to the estate.
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