Tennessee Insurance Practice Exam

If T and S are co-primary beneficiaries on an Accidental Death policy and S dies before the insured, what will the contingent beneficiary receive upon the father's death?

1. The full death benefit

2. Half of the death benefit

3. $0, as the mother is a contingent beneficiary

4. Only funeral expenses

The correct answer is: $0, as the mother is a contingent beneficiary

In the context of beneficiary designations on an Accidental Death policy, the position of the beneficiaries plays a crucial role in determining who receives the death benefit. In this scenario, T and S are co-primary beneficiaries, meaning they are both intended to receive the death benefit equally in the event of the insured's death. If S dies before the insured, S's share does not automatically transfer to the contingent beneficiary. The contingent beneficiary is only entitled to the death benefit in the event that none of the primary beneficiaries survive the insured. Since T is alive at the time of the insured's death, T remains as the primary beneficiary, and therefore will receive the full death benefit. Consequently, the contingent beneficiary, in this case, would not receive anything since there is still a surviving primary beneficiary. This explains why the contingent beneficiary does not receive any portion of the death benefit when a primary beneficiary is still alive and eligible to receive the benefit. The death benefit is directed solely to the surviving primary beneficiary in such situations.