State RegulationsFL specificDifficulty 2/5
A Florida policyowner names his estate as the beneficiary of his life policy. How does this affect the creditor protection Florida law gives beneficiaries?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Chapter 627, Florida Statutes, the creditor protection belongs to benefits payable to a named beneficiary. When the estate is the beneficiary, the proceeds are payable into the probate estate, where creditors' claims are paid before any distribution, forfeiting the protection a living named beneficiary would have had. Agents should counsel clients on this consequence before the designation is made.
Why the other options are wrong
- A) The protection runs to named living beneficiaries, not to the estate as beneficiary.
- B) Probate is exactly where creditors' claims are asserted; supervision does not add protection.
- C) The death benefit remains valid; only the creditor protection is lost by routing proceeds through the estate.
Memory hook
Estate as beneficiary: protection left at the probate door.