Questions: Beverly and Jim are both killed in an automobile accident. Beverly is the primary beneficiary on Jim's life insurance policy. Which of the following will happen to the policy proceeds? A. The proceeds are paid to Beverly's estate. B. The proceeds are paid directly to Jim's estate. C. The proceeds are retained by the insurance company. D. The proceeds are paid to any contingent beneficiaries or to Jim's estate.

The answer is the fourth one (D): The proceeds are paid to any contingent beneficiaries or to Jim's estate.

Explanation for each option:

A. The proceeds are paid to Beverly's estate.

• This option is incorrect because Beverly, the primary beneficiary, is deceased. Typically, life insurance proceeds do not go to the estate of a deceased beneficiary unless specified in the policy.

B. The proceeds are paid directly to Jim's estate.

• This option is partially correct but not the best answer. If there are contingent beneficiaries named in the policy, they would receive the proceeds before Jim's estate.

C. The proceeds are retained by the insurance company.

• This option is incorrect. Life insurance proceeds are not retained by the insurance company; they are paid out according to the terms of the policy.

D. The proceeds are paid to any contingent beneficiaries or to Jim's estate.

• This option is correct. If Beverly, the primary beneficiary, is deceased, the proceeds would go to any named contingent beneficiaries. If no contingent beneficiaries are named, the proceeds would then go to Jim's estate.

Summary: In the event that both the primary beneficiary (Beverly) and the insured (Jim) are deceased, the life insurance proceeds will be paid to any contingent beneficiaries named in the policy. If no contingent beneficiaries are named, the proceeds will be paid to Jim's estate.