Question 2036 of 287 · Texas Life, Accident and Health Agent Exam

Naming a minor child directly as beneficiary can create problems because

Exactly one answer is correct.

Athe insurer may refuse to issue the policy
Bthe proceeds are taxable to the parents
Ca minor cannot legally manage the proceeds, so a court-appointed guardian may be needed
Dthe child must be at least 18 years old at the time the policy is issued

Show solution

Correct answer to question 2036

C: a minor cannot legally manage the proceeds, so a court-appointed guardian may be needed

Explanation

Insurers typically will not pay a minor directly. Naming a trust, custodian under the Uniform Transfers to Minors Act, or an adult trustee avoids court involvement.

2037Designating a beneficiary by class (for example, 'my children') means
2038Premium payment for a 'flexible' premium policy means that
2001A waiver of premium rider on a life policy provides that
2002A guaranteed insurability rider allows the insured to
2003A payor benefit rider is most often attached to a policy on
2004An accidental death benefit rider pays the additional amount if

Naming a minor child directly as beneficiary can create problems because

Correct answer to question 2036

Explanation

More questions: Life: Riders, Provisions, Options and Exclusions