Suppose Sam Greene named two sons as primary beneficiaries and no contingent beneficiaries, and Ira died leaving Ralph and Marie. If Ronald survived his father, in which case would Marie receive 25% of the proceeds when Sam's father died?

• A. If there was no pertinent policy provision and the courts applied the New York Rule
• B. If the policy contained a typical succession-in-interest clause
• C. If the beneficiary designation directed that the proceeds be distributed per stirpes
• D. If the beneficiary designation directed that the proceeds be distributed per capita

Answer: (C)

Per stirpes is the idea that a deceased beneficiary’s share passes to that beneficiary’s descendants, rather than being redistributed among the remaining surviving beneficiaries. This preserves the beneficiary’s line down the family tree.

In this scenario, one of the named primary beneficiaries predeceased the insured and left two children, Ralph and Marie. Under a per stirpes provision, the deceased beneficiary’s share is split equally among their descendants. Since Ira’s line has two children, Ralph and Marie, each receives half of Ira’s share. If Ira’s share would have been 50% of the proceeds, Ralph and Marie would each get 25% of the total. That’s why Marie would receive 25% under per stirpes.

If another method were used (for example, per capita, or a clause that moves shares to the insured’s estate or under a New York Rule framework), the specific distribution would differ and Marie might not receive that 25%. The essence of per stirpes here is keeping Ira’s line intact and distributing Ira’s portion to his descendants, which results in Marie getting a 25% share.