Question

When Mr. Sanders dies, the death benefit is paid to Diane. If Diane dies before Mr. Sanders, the benefits would go to Jane. Which of the following is true?

a) Secondary beneficiary
b) Contingent beneficiary
c) Primary beneficiary
d) Tertiary beneficiary

Answer 1

Diane is the primary beneficiary of Mr. Sanders's death benefit, while Jane is the contingent beneficiary, meaning she will receive the benefit only if Diane predeceases Mr. Sanders.

Step-by-step explanation:

When diagnosing the role of Diane and Jane in relation to Mr. Sanders's death benefit, Diane is the primary beneficiary because she is the first in line to receive the death benefit. If Diane dies before Mr. Sanders, Jane becomes the contingent beneficiary, sometimes referred to as the secondary beneficiary. This means Jane is the person designated to receive the death benefits if the primary beneficiary cannot. The options presented do not include a tertiary beneficiary, which would be the third in line to receive the benefits, if such a person were designated.