Washington Life Producer Practice Exam

Where would policy proceeds be paid if both the insured and primary beneficiary die in the same accident?

1. Insurance company

2. Contingent beneficiary

3. Policy owner

4. Legal heirs

The correct answer is: Contingent beneficiary

In the scenario where both the insured and the primary beneficiary die in the same accident, the proceeds of the policy would go to the contingent beneficiary, assuming one is named in the policy. The contingent beneficiary is designated to receive the benefits if the primary beneficiary is unable to collect due to death or incapacity. This hierarchical structure is designed to ensure that the policy proceeds are distributed according to the policy owner’s wishes, even in unforeseen circumstances where the primary beneficiary is not available to receive the funds. If the contingent beneficiary is not named or is also deceased, the proceeds would then go to the legal heirs, but in this case, since the contingent beneficiary is specified as the correct answer, it indicates that there is a planned order of distribution in place. Such arrangements help to avoid complications and ensure a clear line of succession for the distribution of the insurance benefits.