Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
A life insurance policy contains a common disaster provision. If the insured and the primary beneficiary die in the same accident, the common disaster provision provides that the beneficiary is presumed to have:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A common disaster provision establishes an order of death when the insured and beneficiary die together. Unless the policy states otherwise, the beneficiary is presumed to have died first, so the proceeds are paid to the contingent beneficiary. This prevents the proceeds from flowing to the beneficiary's estate (and possibly to unintended heirs or creditors) when the order of death is unknowable.
Why the other options are wrong
- B) The presumption is that the beneficiary predeceased the insured, so the proceeds do not go to the beneficiary's estate.
- C) The contingent beneficiary retains rights; the provision does not destroy all rights to proceeds.
- D) Payment cannot be made to a deceased beneficiary; the proceeds must pass to a living contingent beneficiary.
Memory hook
Common disaster = when death comes as a pair, the beneficiary is presumed to have left first, and the backup beneficiary inherits.