Texas Life Agent Practice Exam

What provision allows a parent to have complete control of their son's life insurance policy until age 25?

1. Beneficiary designation

2. Ownership provision

3. Coverage provision

4. Consent provision

The correct answer is: Ownership provision

The ownership provision is the correct choice because it designates who has the right to make decisions regarding a life insurance policy. In this particular context, the provision allows a parent to retain full control over the policy until the insured party reaches age 25. This control includes the ability to make changes to the policy, such as updating beneficiaries, adjusting coverage amounts, or even canceling the policy entirely. There are various scenarios in which a parent might want to maintain control over a life insurance policy for their child, particularly in ensuring financial responsibility and safeguarding the interests of the insured until they reach a more mature age. Age 25 is often seen as a transitional period in which a young adult may not yet be fully equipped to manage such financial responsibilities. The other terms listed refer to different aspects of life insurance policies. Beneficiary designation involves the naming of individuals who will receive the death benefits, but without ownership, control remains with someone else. Coverage provision typically addresses the extent and limits of protection provided by the policy. The consent provision, while relevant in some contexts, does not inherently grant the same type of control associated with ownership. Thus, ownership provision is crucial in this scenario to allow a parent to effectively manage the policy until their child reaches a specified age.