In a common accident where the insured and the primary beneficiary die, the policy proceeds would be paid to which party?

• A. The insured’s estate
• B. The children
• C. The primary beneficiary
• D. The insurer

Answer: (B)

When a life policy has a primary beneficiary, that person is the first in line to receive the proceeds. If the primary beneficiary dies before or at the same time as the insured, the policy looks to the contingent (secondary) beneficiary. If the contingent beneficiary is the children in this case, they become the recipients of the payout. This arrangement keeps the money out of the insured’s estate and follows the intended distribution plan. If there were no contingent beneficiary named, the proceeds would typically go to the insured’s estate instead.