Key Concepts
Beneficiary Designation Options - (1) The primary beneficiary is the first in line to receive policy benefits; (2) the secondary beneficiary is the next in line; and (3) the tertiary beneficiary is third.
Common Disaster Provision - Designed to provide an alternative beneficiary in the event that the insured as well as the original beneficiary dies as the result of a common accident.
Facility-of-Payment Provision - A provision found most often in industrial policies permitting an insurer to pay all or a portion of the proceeds to someone who, though not named in the policy, has a valid right in certain situations.
Irrevocable Beneficiary - Beneficiary whose interest cannot be revoked without his or her written consent, usually because the policyowner has made the beneficiary designation without retaining the right to revoke or change it.
Per Capita - Death proceeds from an insurance policy are divided equally among the living primary beneficiaries.
Per Stirpes - Death proceeds from an insurance policy are divided equally among the named beneficiaries. If a named beneficiary is deceased, his or her share then goes to the living descendants of that individual.
Revocable Beneficiary - Beneficiary whose rights in a policy are subject to the policyowner's reserved right to revoke or change the beneficiary designation and the right to surrender or make a loan on the policy without the beneficiary's consent.
Spendthrift Trust Clause - Stipulates that, to the extent permitted by law, policy proceeds shall not be subject to the claims of creditors of the beneficiary or policyowner.
Uniform Simultaneous Death Act - Model law that states when an insured and beneficiary die at the same time, it is presumed that the insured survived the beneficiary.
Familiarize yourself with the Key Concepts in the Florida study manual, Units 7 and 8.
