How do life insurance proceeds pass, and what kind of designation is required?

• A. They pass by beneficiary designation; designation must be in signed writing
• B. They pass through will
• C. They pass by intestacy
• D. They pass to the state if no beneficiaries

Answer: (A)

Life insurance proceeds are paid to the person named in the policy’s beneficiary designation, not through the decedent’s will. The designation controls who receives the money, and it typically bypasses probate.

For the designation to be valid, it must be in a signed writing by the policy owner. Oral or informal designations are generally not enforceable, and the insurer relies on a written, signed designation on file to determine who gets the proceeds. If there is no valid designation, or if all beneficiaries predecease the insured and no contingent beneficiary is named, the proceeds may become part of the insured’s estate and be distributed under the will or by intestacy.