Question

Bill has a $500,000 life insurance policy naming his minor children as beneficiaries. Bill is shot and killed while breaking into his neighbor's home. Will Bill's children likely be able to collect the life insurance proceeds?

a. No, policies often do not cover the insured when he/she violates the law.
b. Yes, as it would not be against public policy for beneficiaries to receive insurance proceeds in such a case.
c. Yes, but not entirely. They will be given an allowance for necessaries with the balance going to others.
d. No, all the proceeds will go to a state administrated crime victims' fund.

Answer 1

Bill's children are likely to receive the full $500,000 life insurance proceeds, as most life insurance policies pay out upon the policyholder's death, regardless of whether they were involved in criminal activities.

Step-by-step explanation:

When Bill is killed while committing a crime, the question of whether his children can collect on his $500,000 life insurance policy arises. Generally speaking, life insurance policies are designed to pay out to beneficiaries upon the policyholder's death, regardless of the circumstances surrounding that death. This means that even though Bill was killed during the commission of a crime, it does not automatically disqualify his beneficiaries from receiving the insurance proceeds. Most life insurance policies do not include a clause that voids the contract in cases of the insured individual's criminal activity; therefore, answer 'b' is most likely correct. The beneficiaries, which are Bill's minor children in this case, would typically be able to collect the full insurance proceeds.