Which clause protects the contingent beneficiary in a common disaster where both the insured and primary beneficiary die in the same event?

• A. Simultaneous death clause
• B. Common disaster clause
• C. Spendthrift clause
• D. Beneficiary designation clause

Answer: (B)

The main idea is how life insurance handles ambiguity when the insured and the primary beneficiary die in the same event. A common disaster clause (often called a simultaneous death clause) provides a rule to determine who receives the death benefit in this scenario. It’s specifically designed to protect the contingent beneficiary by resolving the order of death for policy purposes so the proceeds don’t inadvertently pass to the insured’s estate just because the primary and insured died together. In practice, this clause ensures the contingent beneficiary can still receive the benefit when a shared disaster occurs, rather than letting the money be tied up or go to the wrong party. The other options don’t address the order of death in a common disaster: spendthrift protects against creditors, a beneficiary designation clause just names who gets the money, and the simultaneous/death clause is the mechanism that resolves this particular situation.