The correct answer is:
B. Normally, a guardian is required to be appointed in the Beneficiary clause of the contract.
Step-by-step explanation:
When the beneficiary of a contract, such as a life insurance policy, is a minor, they cannot directly receive the proceeds due to legal capacity limitations. Instead, a guardian is typically appointed to manage the proceeds until the minor reaches the age of majority, which may be 18 or 21, depending on the jurisdiction. The appointment of a guardian in the Beneficiary clause is to ensure that there is a responsible adult who can manage the benefits on behalf of the minor. This guardian is usually named in the life insurance contract or will be appointed by a court.
The other options are generally not true:
- The proceeds are not necessarily "required" to be held in trust until the beneficiary reaches the age of 21; this depends on the terms of the policy or trust documents.
- The minor is not typically responsible for paying the debts of the insured's estate with the proceeds.
- Minors cannot receive the death proceeds immediately in their own right; they must be managed by a guardian or trust.
the complete Question is given below:
Which statement is true regarding a minor beneficiary?
Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
The minor must pay the debts of the insured's estate before receiving any of the proceeds
The minor is entitled to receive the death proceeds immediately