Massachusetts Health & Accident Insurance Practice Exam

In case of the death of the insured, who receives the policy benefits according to the payment of claims provision?

1. The policyowner

2. The primary beneficiary

3. The contingent beneficiary

4. The state

The correct answer is: The primary beneficiary

The primary beneficiary is the individual designated in the insurance policy to receive the benefits upon the death of the insured. This designation is a critical aspect of insurance contracts, as it clearly outlines the intent of the policyholder regarding who should receive the policy's benefits in the event of death. When a policy is set up, the policyowner typically names one or more primary beneficiaries, making it clear who will receive the monetary benefits for which the insurance was purchased. The benefits are paid directly to the primary beneficiary, as long as they are alive at the time of the claim. If the primary beneficiary is not available (for example, in the case of their own death before the insured), the benefits will typically go to the contingent beneficiary, who acts as a secondary recipient. The state would only receive funds in the absence of any designated beneficiaries or if there are claims about the will and estate that direct the funds to the government. Such a scenario is not common within the context of a standard claim; rather, the emphasis is placed on honoring the wishes of the policyowner as expressed in the policy. Therefore, in this situation where the insured has passed away, the primary beneficiary is the correct choice for receiving the policy benefits according to the payment of claims provision