Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A policyowner names her children as beneficiaries with the designation my children, per stirpes. At the insured's death, one child has already died, leaving two children of her own. How is the deceased child's share distributed?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under a per stirpes designation, the deceased beneficiary's share passes down to that beneficiary's descendants, who take by right of representation. Here the deceased child's share is divided equally between her two children. This contrasts with per capita, under which the surviving named beneficiaries would split the entire fund equally and the deceased child's descendants would receive nothing unless the designation provides otherwise.
Why the other options are wrong
- B) Dividing the entire fund among the surviving named children only is the per capita result, not per stirpes.
- C) The share does not lapse back to the insurer; per stirpes directs it to the deceased child's descendants.
- D) No escheat to the state occurs when there are descendants entitled by representation.
Memory hook
Per stirpes follows the family branch downward. Per capita splits among the named heads only. Stirpes = share by lineage.