State RegulationsAZ specificDifficulty 2/5
An Arizona insured named his spouse as beneficiary of his life policy; the spouse died before him and he never named a replacement. The insured has now died with no surviving beneficiary. Under A.R.S. 20-1215, to whom are the proceeds payable?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under A.R.S. 20-1215, life insurance proceeds are paid according to the beneficiary designation; when the designated beneficiary has predeceased and no new designation exists, the proceeds are payable to the insured's estate. The insurer cannot divert the funds to other relatives or hold them on its own books, so opening the estate is the lawful route to receive the death benefit.
Why the other options are wrong
- A) The insurer has no authority to park proceeds in a reserve; A.R.S. 20-1215 directs payment to the estate when no beneficiary survives.
- C) The predeceased spouse's relatives have no claim under the policy; payment follows the beneficiary designation or the estate.
- D) The insurer cannot select among relatives; A.R.S. 20-1215 fixes payment to the estate absent a valid beneficiary designation.
Memory hook
Beneficiary gone, no new name — proceeds go to the estate.