Question

John Doe buys a life insurance policy and names his wife, Jane Doe, as the primary beneficiary. He names son, Jack, as the contingent beneficiary. One night, they forget to turn off the gas on the stove, and while sleeping, something sparks and blows the house up. Both tragically die in the fire/explosion. Jack was away at college on the night of their death. It its unknown who died first. The death benefit of John's policy is paid to_________

O John's estate.
O Jane's estate.
O Jack.
O The benefit is not paid out.
O The insurer holds the benefit until the courts decide.
O None of the above.

Answer 1

The death benefit of John Doe's life insurance policy is likely paid to Jack, the contingent beneficiary, because the Uniform Simultaneous Death Act applies when it's unclear who between the policyholder and the primary beneficiary died first. The primary beneficiary, Jane Doe, is presumed to have predeceased John, directing the death benefit to Jack, unless specified differently in the policy or by state law.

Step-by-step explanation:

When John Doe named his wife, Jane Doe, as the primary beneficiary and their son, Jack, as the contingent beneficiary of his life insurance policy, it was intended to determine the distribution of the death benefit in case of John's passing. In the tragic event that both John and Jane Doe die simultaneously or under uncertain circumstances where it's unknown who died first, most life insurance policies and state laws apply the Uniform Simultaneous Death Act. This act presumes that the primary beneficiary died first in such a situation. Therefore, since the primary beneficiary is deemed to have predeceased the policyholder, the death benefit would typically be paid to the contingent beneficiary, Jack, unless there's a different provision in the policy or overriding state law.

In the case where both a policyholder and the primary beneficiary die and the order of deaths cannot be determined, the benefit is not paid to the estate of the policyholder but rather to the contingent beneficiary, unless again, the policy states otherwise or there's specific state legislation that provides for a different outcome. If no contingent beneficiary is named or able to claim the benefit, then the payout would generally go to the policyholder's estate. However, this scenario specifies Jack as the contingent beneficiary who is alive and therefore, he would likely receive the death benefit in the absence of any alternate legal factors.