Minors have all the following contracting capacities regarding life insurance EXCEPT

• A. Many states grant legal capacity for purchase at age fifteen.
• B. They are unlimited in whom they can name as beneficiaries.
• C. They may disaffirm a contract at any time during their minority.
• D. In some states, they lack capacity to own a policy on the life of another person.

Answer: (B)

Minors’ ability to enter life insurance contracts is limited and depends on the state. Some states do recognize a minor’s capacity to purchase a policy at a young age (for example, around fifteen), while other aspects depend on insurable interest and who can be owner. A minor’s right to disaffirm a contract exists during minority, though the exact timing and effects can vary by jurisdiction. Ownership and the ability to own a policy on the life of another person also aren’t universal; in some states a minor may lack capacity to own such a policy due to insurable-interest rules or other limitations. Because of these nuances, the idea that a minor is unlimited in whom they can name as beneficiaries is not correct. Beneficiary designations are not entirely unrestricted for a minor, reflecting the protective and regulatory framework around these contracts.