Arizona Life and Health Practice Exam

Who typically selects the beneficiary of a life insurance policy?

1. The insured

2. The insurance agent

3. The policyowner

4. The insurer

The correct answer is: The policyowner

The policyowner typically selects the beneficiary of a life insurance policy. This is because the policyowner has the rights to determine how the death benefit will be distributed in the event of their passing. The beneficiary designation is a crucial aspect of the policy because it ensures that the proceeds are directed to the individual or entity of the policyowner’s choice. The insured, while they may be the policyowner, does not have the exclusive rights to select the beneficiary if they are not the owner of the policy. The insurance agent acts as an advisor and facilitator in the process but does not have authority over the beneficiary selection. The insurer is responsible for issuing the policy and paying the benefits but does not possess the authority to dictate who the beneficiary will be. Thus, the policyowner retains the primary responsibility for selecting the beneficiary within the framework established by the insurance contract.