California Life-Only & Accident and Health AgentLife InsuranceMedium
A life insurance policyowner has designated their spouse as the primary beneficiary and their adult child as the contingent beneficiary. If the policyowner and their spouse die simultaneously in a car accident, and the policy includes the Uniform Simultaneous Death Act provision, how will the death benefit be distributed?
- AThe death benefit will be paid to the adult child.
- BThe death benefit will be split equally between the spouse's estate and the adult child.
- CThe death benefit will revert to the policyowner's estate.
- DThe death benefit will be paid to the spouse's estate.
Show answer & explanationAnswer & explanation
Correct answer: A. The death benefit will be paid to the adult child.
The Uniform Simultaneous Death Act (USDA) provision stipulates that if the insured and the primary beneficiary die at the same time, it is presumed the primary beneficiary died first. This allows the death benefit to pass to the contingent beneficiary, as if the primary beneficiary never existed for the purpose of the policy.
Why the other options are wrong
- B. The USDA prevents this split by presuming the primary died first, clearing the way for the contingent.
- C. This would happen only if there were no surviving beneficiaries (primary or contingent).
- D. This would happen if the spouse survived the insured, even briefly, without the USDA provision.
Uniform Simultaneous Death Act (USDA)
A law or policy provision that dictates how life insurance proceeds are distributed when the insured and primary beneficiary die at the same time.
- Presumes primary beneficiary died before the insured.
- Allows death benefit to pass to contingent beneficiary.
- Prevents proceeds from going to primary beneficiary's estate.
Memory trick: Who gets the gold when lives unfold?