Difficulty: Medium

Average Score: 71%

Which of the following MUST be TRUE in order for a minor to receive proceeds from a death benefit?

Rationale

The minor must have an appointed guardian.

In order for a minor to receive proceeds from a death benefit, it is necessary for them to have a legally appointed guardian who can manage the funds on their behalf. This requirement ensures that the minor's financial interests are protected and that the benefits are administered in a responsible manner.

A (The minor must be related to the insured.) YOUR ANSWER

While being related to the insured can often be the case, it is not a legal requirement for a minor to receive death benefit proceeds. A minor can be named as a beneficiary regardless of their relationship to the insured, as long as proper legal structures, such as guardianship, are in place.

B (The minor can only be named as a contingent beneficiary.) YOUR ANSWER

Minors can be named as either primary or contingent beneficiaries, depending on the terms of the insurance policy. There is no restriction preventing a minor from being a primary beneficiary, provided that a guardian is appointed to handle the proceeds.

C (The minor must be at least 16 years old.) YOUR ANSWER

The age of 16 is not a universal requirement for minors to receive death benefit proceeds. Legal age requirements may vary by jurisdiction, and the crucial factor is having a guardian rather than the minor's age itself.

D (The minor must have an appointed guardian.) CORRECT

This statement is true and essential. Appointing a guardian ensures that the minor's interests are represented and that the proceeds are managed appropriately, fulfilling legal and fiduciary responsibilities.

Conclusion

For a minor to receive proceeds from a death benefit, having an appointed guardian is a critical legal requirement. This ensures the protection and proper management of the funds intended for the minor's benefit. Other options regarding the relationship to the insured, age, or beneficiary status do not necessarily dictate the ability of a minor to receive these proceeds.

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