Final answer:
In the case of Max and Janet's simultaneous deaths, the life policy's proceeds would be disbursed to a contingent beneficiary or Max's estate if there are no surviving beneficiaries, guided by the policy's terms and state law.
Step-by-step explanation:
When Max and Janet were killed simultaneously and Max had a life policy with Janet as the primary beneficiary, the disbursement of the policy's proceeds would typically be determined by the policy's terms and applicable state law.
In many jurisdictions, there is a common disaster provision or a law such as the Uniform Simultaneous Death Act, which presumes that the primary beneficiary died first in a simultaneous death situation.
This means that if Janet is considered to have died first, the benefits would likely pass to the contingent or secondary beneficiary designated on the policy. If no such beneficiary exists, the benefits would then be paid out according to the estate of the insured, Max, under the terms of his will or the state's succession laws if there is no will.
A cash-value (whole) life insurance policy not only has a death benefit but also accumulates a cash value over time, which can serve as an account for use by the policyholder during their lifetime.
However, in the event of death, the cash value typically gets added to the death benefit and is paid out to the beneficiaries.