Which designation splits the policy proceeds among living beneficiaries, with a deceased beneficiary receiving nothing?

Which designation splits the policy proceeds among living beneficiaries, with a deceased beneficiary receiving nothing?

• A. Per stirpes designation
• B. Estates
• C. Per capita designation
• D. Revocable designation

Answer: (C)

Understanding how beneficiary designations split proceeds when some beneficiaries may not survive the insured is the key idea. In a per capita arrangement, the policy's proceeds are divided equally among the living beneficiaries at the time of payout. If a named beneficiary has died, that share is redistributed among the remaining living beneficiaries, so a deceased beneficiary receives nothing. This means the payout goes to who is alive, in equal parts, rather than passing to the deceased’s descendants. For contrast, per stirpes would allocate a deceased beneficiary’s share to that person’s own descendants, not to the surviving beneficiaries. An estates designation would route the proceeds to the deceased beneficiary’s estate, which is a different recipient than the living beneficiaries. And a revocable designation concerns whether the policy owner can change the beneficiary, not how the payout is distributed among those who survive.

Understanding how beneficiary designations split proceeds when some beneficiaries may not survive the insured is the key idea. In a per capita arrangement, the policy's proceeds are divided equally among the living beneficiaries at the time of payout. If a named beneficiary has died, that share is redistributed among the remaining living beneficiaries, so a deceased beneficiary receives nothing. This means the payout goes to who is alive, in equal parts, rather than passing to the deceased’s descendants.

For contrast, per stirpes would allocate a deceased beneficiary’s share to that person’s own descendants, not to the surviving beneficiaries. An estates designation would route the proceeds to the deceased beneficiary’s estate, which is a different recipient than the living beneficiaries. And a revocable designation concerns whether the policy owner can change the beneficiary, not how the payout is distributed among those who survive.