State RegulationsOH specificDifficulty 1/5
A life insurance policy names 'the Estate of the Insured' as the sole beneficiary. What is the most significant practical consequence of this designation for the death proceeds?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
When the estate is the named beneficiary, there is no individual payee, so the proceeds are payable to the estate and are administered through probate, where they become estate assets available to satisfy creditor claims (Ohio beneficiary framework, ORC 3911.09 and companion sections). Naming individuals or a trust instead keeps the proceeds outside probate.
Why the other options are wrong
- A) The proceeds do not escheat to the state; they are paid to the estate and administered through probate.
- C) Distribution follows the insured's will or the intestate succession statute, not a blood-relative-only rule.
- D) Exactly the opposite occurs: an estate designation routes the proceeds through probate rather than avoiding it.
Memory hook
Estate beneficiary = probate bait; name people or trusts to skip it.