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:

Why D is correct

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.

Why the other options are wrong

• A) The presumption runs the other way: the beneficiary is presumed to have predeceased the insured, not the reverse.
• B) Proceeds are never forfeited to the state under the common disaster provision; they pass to contingent beneficiaries or the insured's estate.
• C) There is no doubling of proceeds; the full face amount is paid to the next in line.

Memory hook

Same-time deaths: the beneficiary is presumed to go first.