Question

Emma Clumsy, the insured, makes a contract with Rest in Peace Insurance Company, the insurer, whereby Emma will pay quarterly premiums of $200.00. Upon Emma's death, $400,000 will go to her son, Henry as the beneficiary. Further, the policy required that upon Emma's death, the beneficiary must notify the insurer within three months. Emma did not inform Matthew that he was her beneficiary. Emma died and her policy was not found until four months later. Upon finding the policy, Henry informed Rest in Peace Insurance Company that Emma had passed away, but it refused to pay him the money. Henry sued claiming that he was that he was not bound by the time limitation because he did not agree to it.

In this situation, Henry is ______________.

Answer 1

Henry is the intended beneficiary of the insurance policy and as such, he is bound to the time limitations and all the other clauses included in the contract.

Explanation:

Intended beneficiaries are third parties that can benefit from a contract. Third parties are not part of the contract and may not even know that they were included as beneficiaries in it, but they are bound by all the legal clauses included in the contract. They must be included in the contract and all the benefits they might obtain have to be explicitly established.