State RegulationsFL specificDifficulty 2/5
A Florida insured wants his life insurance death benefit to receive the strongest protection from his own creditors. How should he designate the beneficiary?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Chapter 627, Florida Statutes, the standard-provision framework for life contracts protects proceeds payable to a named beneficiary from the insured's creditors. Proceeds payable to the insured's own estate, by contrast, pass through probate where the estate's creditors are paid, so the planning move that maximizes protection is naming a specific living beneficiary rather than the estate.
Why the other options are wrong
- A) Naming the estate routes the proceeds through probate, where creditors' claims are satisfied, defeating the protection.
- C) Naming a creditor simply directs the money to that creditor; it does not protect anything for the insured's family.
- D) The beneficiary designation is precisely what controls whether proceeds stay beyond creditors' reach.
Memory hook
Estate means exposed; a named beneficiary means protected.