Policy Riders, Provisions, Options, and Exclusions
An owner creates a trust for minor children and names the trust as policy beneficiary. What is the trustee's relevant role after the insured's death?
Answer and explanation
Answer: A. When a trust is properly named, the trustee receives and manages the proceeds according to the trust terms for the children's benefit. The trustee does not rewrite policy terms or guarantee dividends.Source: National Association of Insurance Commissioners — Life Insurance — Tips for naming beneficiaries > Minor Children
More policy riders, provisions, options, and exclusions questions
- A flexible-premium policyowner pays the illustrated planned premium, but policy value later becomes insufficient for the monthly deduction. Which conclusion is most accurate?
- A governing beneficiary instrument expressly states how to distribute proceeds after simultaneous deaths. How does that fact affect Texas's default survival rules?
- A grandparent buys a juvenile life policy on a 5-year-old grandchild with a payor benefit rider. The grandparent dies 3 years later. What occurs regarding policy premiums?
- A life policy contains a status-type war exclusion and the insured, a service member, dies of an illness while stationed overseas in peacetime. How does the exclusion operate?
- A parent pays premiums on a juvenile life policy and dies before the insured child reaches majority. If the policy has a payor benefit rider and its conditions are met, what happens next?
- A parent wants life proceeds reserved for a young child. Which arrangement best addresses the problem that an insurer will not pay proceeds directly to a minor?
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