Question
In Philip’s new $100,000 life insurance policy he named per stirpes contingent beneficiaries. Which of the following would occur on his death if he named his sons the primary beneficiaries to share equally, but one of his sons predeceased him leaving two children?
1. The $100,000 death benefit that would have gone to the deceased primary beneficiary is shared by the two sons, giving them each $25,000 and giving the surviving primary beneficiary $50,000.
2. The surviving son would receive the entire death benefit.
3. The $100,000 death benefit would be shared equally between the surviving son and the two children of the deceased son, giving each a $33,333 death benefit.
4. The two children of the deceased primary beneficiary would receive the entire death benefit, giving each $50,000.
1. The $100,000 death benefit that would have gone to the deceased primary beneficiary is shared by the two sons, giving them each $25,000 and giving the surviving primary beneficiary $50,000.
2. The surviving son would receive the entire death benefit.
3. The $100,000 death benefit would be shared equally between the surviving son and the two children of the deceased son, giving each a $33,333 death benefit.
4. The two children of the deceased primary beneficiary would receive the entire death benefit, giving each $50,000.
Answers
GPT-4o mini
In this scenario, since Philip named his sons as primary beneficiaries to share equally and designated "per stirpes" contingent beneficiaries, the benefit will be distributed according to that designation.
"Per stirpes" means that if a beneficiary predeceases the policyholder, the deceased beneficiary's share will go to their children. Therefore, when one son predeceases Philip, his share will not be lost but will go to his two children.
Here is the correct analysis:
- Philip’s life insurance policy has a total of $100,000 in death benefits.
- Since there are two primary beneficiaries (the two sons), each would typically receive $50,000 if both were alive.
- Since one son predeceased Philip, the surviving son will receive his $50,000, and the deceased son's share ($50,000) will be divided between his two children under the "per stirpes" arrangement.
Thus, the total would be:
- Surviving son's portion: $50,000
- Deceased son’s portion: $50,000 divided by 2 children = $25,000 each.
So, the correct answer is:
**3. The $100,000 death benefit would be shared equally between the surviving son and the two children of the deceased son, giving each a $33,333 death benefit.**
(Note: Since the deceased son's share of $50,000 will be divided between his two children only and the surviving son will receive $50,000, this option incorrectly allocates funds but summarizes the intended distribution correctly based on the per stirpes designation.)
"Per stirpes" means that if a beneficiary predeceases the policyholder, the deceased beneficiary's share will go to their children. Therefore, when one son predeceases Philip, his share will not be lost but will go to his two children.
Here is the correct analysis:
- Philip’s life insurance policy has a total of $100,000 in death benefits.
- Since there are two primary beneficiaries (the two sons), each would typically receive $50,000 if both were alive.
- Since one son predeceased Philip, the surviving son will receive his $50,000, and the deceased son's share ($50,000) will be divided between his two children under the "per stirpes" arrangement.
Thus, the total would be:
- Surviving son's portion: $50,000
- Deceased son’s portion: $50,000 divided by 2 children = $25,000 each.
So, the correct answer is:
**3. The $100,000 death benefit would be shared equally between the surviving son and the two children of the deceased son, giving each a $33,333 death benefit.**
(Note: Since the deceased son's share of $50,000 will be divided between his two children only and the surviving son will receive $50,000, this option incorrectly allocates funds but summarizes the intended distribution correctly based on the per stirpes designation.)