Texas Life Agent Practice Exam

In a situation where Carl Burk buys a Life insurance policy on his wife, who should be designated as the beneficiary?

1. The Insured

2. The Policy owner

3. An Independent Trustee

4. The Business Partner

The correct answer is: The Policy owner

In the scenario where Carl Burk purchases a life insurance policy on his wife, it is appropriate for him to be designated as the policy owner, making him the beneficiary as well. The policy owner is the individual who pays the premiums and controls the policy, which includes the power to make adjustments such as changing the beneficiary or accessing cash value if applicable. Designating the policy owner as the beneficiary ensures that the intended financial support is directed to the right person after the insured’s passing. Carl, as the husband, likely wants to provide for himself and possibly dependents in the event of his wife's death, warranting his designation as the beneficiary. In contrast, other options like an independent trustee or business partner would typically be relevant in different contexts, such as business arrangements or trust setups, rather than in a personal life insurance arrangement where the focus is on family and personal financial planning. Thus, selecting the policy owner as the beneficiary aligns with the personal nature of life insurance and the intent to provide for loved ones.