Pennsylvania Life and Health Insurance Exam Practice Question
Who is the beneficiary on a key person insurance policy?
Correct Answer: B
Rationale: In a key person insurance policy, the employer is designated as the beneficiary because the policy is intended to protect the business from financial losses resulting from the death or disability of a vital employee.
Option A, business partner, is incorrect as the policy focuses on the employer's interests rather than individual partnerships. Option C, insured's spouse, does not apply since the policy aims to safeguard the business rather than provide personal benefits to family members. Option D, employee, is also wrong because the employee is the insured party, not the beneficiary, as the employer receives the payout to mitigate business risks.
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