Question

Naomi is the tertiary beneficiary on her uncle's life insurance policy. Under what circumstances would she collect the benefits of the plan? a) When the primary and secondary beneficiaries are deceased b) When the policyholder decides to cash out the policy c) When the policy matures and reaches its endowment age d) When the policyholder changes the beneficiaries in the will

Answer 1

A tertiary beneficiary on a life insurance policy, like Naomi, would only receive benefits if both the primary and secondary beneficiaries are deceased. Cash outs, policy maturation or changes to the will would not grant her the benefits.

Step-by-step explanation:

Naomi, as a tertiary beneficiary on her uncle's life insurance policy, would only collect the benefits of the plan under one specific circumstance: when the primary and secondary beneficiaries are both deceased. This means that if the primary beneficiary passes away and the secondary beneficiary is still alive, Naomi would not yet receive the benefits. She would need to wait until the secondary beneficiary passes away as well. She would not acquire the benefits if the policyholder chose to cash out the policy or if it matured and reached its endowment age. Likewise, changes to the beneficiaries in the will would not affect her status as the tertiary beneficiary of the life insurance policy.

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