State RegulationsMA specificDifficulty 2/5
A Massachusetts life policy names the insured's spouse as policyowner, although the spouse is not the insured. Under the ownership provision, M.G.L. c. 175, § 134C, who holds the rights of ownership such as assigning the policy and receiving its values?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.G.L. c. 175, § 134C recognizes that ownership of a life policy may rest in a person other than the insured. The named policyowner — here the spouse — exercises the rights of ownership, including assignment and receipt of the policy's values. Distinguishing the owner from the insured and from the beneficiary is fundamental to advising on who may direct the contract.
Why the other options are wrong
- B) Massachusetts law does not confine ownership to the insured; M.G.L. c. 175, § 134C expressly accommodates an owner who is someone other than the insured.
- C) The beneficiary receives the death benefit when the insured dies; beneficiary status does not confer the owner's rights of assignment and receipt of values.
- D) The producer of record sold the policy and has no ownership rights in it; ownership belongs to the named policyowner under M.G.L. c. 175, § 134C.
Memory hook
Owner and insured are separate seats — § 134C lets different people sit in them.