Rhode Island Life Insurance Practice Exam

Where will the proceeds from E's life insurance policy be directed after his death?

1. F

2. E's children

3. Life insurance company

4. Government

The correct answer is: F

The proceeds from a life insurance policy are typically directed according to the beneficiary designation made by the policyholder, in this case, E. If E has designated F as the beneficiary of his life insurance policy, then upon his death, the life insurance company will pay the death benefit directly to F. This holds true regardless of any other relationships or heirs involved, provided the policy is active and the beneficiary designation has not been altered or contested. In contrast, if E had designated his children or any other party, the proceeds would go to them instead. Similarly, the life insurance company itself does not receive the proceeds unless it is listed as a beneficiary, which is uncommon. The government would not typically receive life insurance proceeds unless there are unpaid taxes or debts linked to E's estate that would require settlement. Therefore, the correct answer focuses on the role of the designated beneficiary in determining where the funds will go after E's death.