CARD Q041
A beneficiary designation reads “my children” instead of listing each child by name. What type of designation is this?
- Designation by class
- Collateral assignment
- A fixed-period settlement
- An irrevocable trust by definition
Designation by class
A class designation identifies a group. Who qualifies is determined by the designation, policy terms, and applicable law.
Why each choice is right or wrong
A. Designation by class
Correct. A class designation identifies a group. Who qualifies is determined by the designation, policy terms, and applicable law.
B. Collateral assignment
Incorrect. Collateral assignment gives a creditor security rights; it does not describe naming a group of beneficiaries.
C. A fixed-period settlement
Incorrect. A fixed-period settlement determines payment duration.
D. An irrevocable trust by definition
Incorrect. Naming a class does not automatically create an irrevocable trust.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.