A common disaster (simultaneous death) provision in a life insurance policy typically states that if the insured and the beneficiary die in the same accident:

Why D is correct

The common disaster clause, often called the simultaneous death provision, addresses the situation where the insured and the primary beneficiary die in the same accident or under circumstances where the order of death is unknown. It presumes that the beneficiary died first, so the death benefit is paid to the contingent beneficiary or, if none, to the insured's estate. This avoids the proceeds being dragged through the beneficiary's estate and taxed twice, and it lets the policyowner's intended plan for distribution control who receives the money.

Why the other options are wrong

• A) The presumption runs the other way: the beneficiary is presumed to have predeceased the insured, not the reverse.
• B) Proceeds are never forfeited to the state under the common disaster provision; they pass to contingent beneficiaries or the insured's estate.
• C) There is no doubling of proceeds; the full face amount is paid to the next in line.

Memory hook

Same-time deaths: the beneficiary is presumed to go first.

Why A is correct

A common disaster clause, consistent with the Uniform Simultaneous Death Act, creates a presumption of survivorship to prevent the proceeds from passing through the beneficiary's estate and then being distributed according to the beneficiary's will. Typically the clause provides that if the insured and the beneficiary die simultaneously or within a short specified period, the beneficiary is deemed to have predeceased the insured, and the proceeds go to the contingent beneficiary or the insured's estate. This keeps the death benefit flowing according to the insured's intent rather than the beneficiary's testamentary plan.

Why the other options are wrong

• B) Equal division is not what the clause provides. The clause orders survivorship between the parties instead of splitting the proceeds between estates.
• C) The insurer always pays the proceeds to someone. Simultaneous death never forfeits the death benefit; it only determines who receives it.
• D) The clause presumes the beneficiary died first, not the insured. As a result, the beneficiary's estate takes nothing under the policy.

Memory hook

Common disaster equals a presumption of order, so the money follows the insured's plan.