CARD T111
Per Stirpes
A distribution method passing a deceased beneficiary’s share to that beneficiary’s descendants by family branch. It differs from dividing only among surviving named individuals.
How it works
Per stirpes distributes by family branch. In a simple two-child designation, a deceased child’s share can pass to that child’s descendants rather than being redirected entirely to the surviving child. The precise wording and applicable law matter, especially if multiple generations are involved. [9]
A $120,000 benefit is divided between two children per stirpes. One child survives; the other died leaving two children. Under this stated branch arrangement, the survivor receives $60,000 and the two grandchildren receive $30,000 each.
Per stirpes follows branches; it does not mean equal dollars for everyone across generations.
CARD T112
Per Capita
A distribution method allocating equal shares among eligible recipients at the designated level. The policy’s wording determines who participates.
How it works
Per capita means by head: equal shares among eligible recipients at the level specified. Identify that group before dividing. A designation limited to surviving children differs from one that expressly includes other descendants. Do not automatically send a deceased person’s share down a branch unless the governing wording does so. [9]
The policy explicitly directs $90,000 equally to three surviving children per capita. Each receives $30,000. If only two qualify under that same surviving-children wording, each receives $45,000.
First identify eligible recipients; then divide equally among them.
CARD T113
Designation by Class
Naming a group of beneficiaries rather than listing each person individually. For example, “My children” identifies a class. The policy wording and applicable law determine who belongs to that class when benefits become payable.
How it works
A class designation identifies beneficiaries by group, such as children, rather than naming each member. The wording determines membership, timing, and allocation. Adoption, stepchildren, later-born children, and descendants of a deceased member can raise questions that should be addressed explicitly. Do not assume every family term includes every possible relationship. [9] [19]
An owner writes “my children, equally” instead of listing names. That is a class designation; the governing definition determines which children qualify when benefits become payable.
Class designation identifies who belongs. Per stirpes or per capita addresses how the eligible shares are distributed.
CARD T114
Common Disaster Provision
A provision addressing benefit distribution when the insured and beneficiary die in the same event or close together. Timing requirements depend on applicable terms and law.
How it works
A common-disaster clause or simultaneous-death rule determines payment when the insured and beneficiary die together or the order of death is uncertain. Some provisions require the beneficiary to survive the insured for a stated period. One common statutory approach treats the insured as having outlived the beneficiary when there is insufficient evidence of order, unless the policy directs otherwise. Use the actual rule stated in an exam question. [10] [19]
A question specifies that a primary must survive the insured by 30 days. The primary dies 10 days after the insured; an eligible contingent receives the benefit under those stated terms.
Surviving by a few hours may not satisfy a separately stated survival period.
APPLY THE TERMS
Practice questions
Select an answer, then check it to see why each option is right or wrong.
T111 · Per Stirpes
0 of 3 answered
T112 · Per Capita
0 of 3 answered
T113 · Designation by Class
0 of 3 answered
T114 · Common Disaster Provision
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Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.