Question

D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?

Answer 1

It is the ex-wife! :)

Answer 2

Group of answer choices:

A) Ex-wife

B) Current Wife

C) Estate

D) Split equally between the ex-wife and current wife

Answer:

The correct answer is letter "A": Ex-wife.

Explanation:

The purpose of life insurances is to provide an amount of money to the insured's beneficiary after his or her pass away so the beneficiary could be able to face that unfortunate situation. The insured is able to choose any person as the beneficiary being popular to assign the spouse. In front of divorces, both the beneficiaries and the policy ownership must be changed.

In the example, D made a mistake in only changing the ownership to his new wife since also the beneficiary had to be modified. Because of that, if D passes away, his ex-wife would be receiving the insurance benefit.