New York Insurance Exam Practice Question
What is the purpose of a beneficiary designation?
Correct Answer: B
Rationale: A beneficiary designation specifically identifies who will receive the death benefit from a policy, ensuring that funds are distributed according to the policyholder's wishes.
Option A is incorrect because premium amounts are determined by the insurer based on various factors, not by beneficiary designations. Option C is misleading; while the policy may have a cash value, this is established at the outset and not influenced by who the beneficiaries are. Option D is also incorrect, as waiving premium payments is a separate provision typically related to specific circumstances, not tied to beneficiary designations.
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