Who will receive the $100,000 death benefit?

When Tim and Patricia were common-law spouses, they met with an insurance agent, Aelia, to purchase life insurance policies of $100,000 each, naming each other as beneficiaries of their policies. Five years later, Patricia leaves Tim to be with her personal trainer, Thomas. A year later, Patricia and Thomas marry, and Patricia gives birth to their baby, Cedrick. Tragically, just before Cedrick’s 12th birthday, Patricia dies in a fiery car crash. She never modified her beneficiary designation.

Shortly after the crash, Thomas calls Aelia to inform her that Patricia has died and that he wants to claim the death benefit on her life insurance policy.

Who will receive the $100,000 death benefit?
A . Tim
B . Thomas
C . Cedrick
D . Patricia’s estate

View Answer

Answer: A

Explanation:

Since Patricia did not modify the beneficiary designation on her life insurance policy after separating from Tim, he remains the named beneficiary. Under LLQP guidelines, the original beneficiary designation stands unless explicitly changed by the policyholder. This means that, despite Patricia’s remarriage and the birth of her child Cedrick, Tim remains the beneficiary and will receive the $100,000 death benefit.

Beneficiary designations on life insurance policies are not automatically altered by life events such as marriage or the birth of a child. Therefore, in the absence of any updates, Tim remains the beneficiary as per Patricia’s original designation.