Tennessee Life Producer Practice Exam

If D, the policyowner, transfers ownership of his policy to his new wife, who will receive the policy proceeds if D dies without making further changes?

1. The new wife

2. The ex-wife

3. The children from the marriage

4. The policy will go to the estate of D

The correct answer is: The ex-wife

In the scenario where D, the policyowner, transfers ownership of his life insurance policy to his new wife, the correct recipient of the policy proceeds upon D's death would indeed be the new wife. When ownership of a policy is transferred, the new owner holds all rights, including the ability to receive the benefits upon the policyholder's death. If D did not make any further changes after transferring the policy to his new wife, she would be the beneficiary of the policy proceeds. The policy proceeds go directly to the owner of the policy at the time of death, which, in this case, is the new wife who received the transfer of ownership. Therefore, any assumption about the proceeds going to an ex-wife, or other relatives, would be inaccurate as they have no claim to the benefits once the ownership has legally transferred to the new wife. Recognizing the importance of the ownership transfer, it's clear that the beneficiary status tied to the policy can change based on the ownership situation. The original beneficiary designation might have been in favor of the ex-wife, but transferring ownership to the new wife supersedes prior beneficiary designations related to the original policy owner. Thus, the new wife stands to collect the proceeds from the policy upon D's death, provided no