If a life insurance policy designates Elizabeth as a beneficiary, who receives the death benefit?

• A. The insured
• B. The beneficiary
• C. The policyowner
• D. The insurer

Answer: (B)

The death benefit goes to the person named as the beneficiary on the policy. If Elizabeth is designated as the beneficiary, she is the one who will receive the payout when the insured dies. The insured is the person whose life is insured, not the recipient of the proceeds; the policyowner is who controls the policy and may be a different person; the insurer is the company that pays the claim. If the beneficiary designation is revocable, the policyowner can change it; if it’s irrevocable, changes require the beneficiary’s consent. Primary and contingent beneficiaries determine who receives the benefit if the primary cannot.