Tennessee Insurance Practice Exam

If both the insured and the primary beneficiary die in the same accident and it cannot be determined who died first, where will the death proceeds go according to the uniform simultaneous death act?

1. Primary beneficiary's estate

2. Insured's contingent beneficiary

3. Policy owner's estate

4. Common beneficiary

The correct answer is: Insured's contingent beneficiary

Under the Uniform Simultaneous Death Act, when both the insured and the primary beneficiary die simultaneously and it is impossible to determine who died first, the death proceeds of the insurance policy are directed to the contingent beneficiary. This is established to ensure that the insurance proceeds are not unfairly distributed to someone who may have passed away in a position to benefit from the insured’s demise. By designating the proceeds to the contingent beneficiary, the law aims to prevent the primary beneficiary from receiving benefits when their death is concurrent with that of the insured. Thus, the contingent beneficiary becomes the rightful recipient of the death benefit, preserving the intent of the policyholder. This outcome emphasizes the need for clear beneficiary designations and highlights the legal mechanisms in place which ensure fair handling of insurance claims in complex situations like simultaneous deaths.