Common Disaster Clause
A policy provision embodying the simultaneous-death rule: the beneficiary must survive the insured by a stated period (such as 30 days) to receive proceeds; otherwise the contingent collects.
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Practice This Concept
A common disaster (simultaneous death) provision in a life insurance policy typically states that if the insured and the beneficiary die in the same accident:
The beneficiary is presumed to have predeceased the insured, so the proceeds pass as if the beneficiary died first. — The common disaster clause, often called the simultaneous death provision, addresses the situation where the insured and the primary beneficiary die in the same accident or under circumstances where the order of death is unknown. It presumes that the beneficiary died first, so the death benefit is paid to the contingent beneficiary or, if none, to the insured's estate. This avoids the proceeds being dragged through the beneficiary's estate and taxed twice, and it lets the policyowner's intended plan for distribution control who receives the money.
National insurance concept
A life insurance policy contains a common disaster (survivorship) clause. The insured and the primary beneficiary die in the same accident, and the order of death cannot be determined. Under the standard simultaneous-death provision, the primary beneficiary is presumed to have:
Died first, so the proceeds are paid to the contingent beneficiary or the insured's estate as if the primary beneficiary predeceased the insured — The common disaster clause, based on the Uniform Simultaneous Death Act, provides that when the insured and the primary beneficiary die in a common accident and the order of deaths cannot be established, the primary beneficiary is presumed to have died first. The proceeds are therefore paid as if the primary beneficiary had predeceased the insured, meaning they go to the contingent beneficiary, or to the insured's estate if no contingent beneficiary exists. This prevents the proceeds from passing to the beneficiary's heirs unnecessarily.
National insurance concept
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