The American rule regarding multiple assignees of the same insurance policy states which of the following?

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Prepare for the Legal Aspect of Life Insurance Test. Enhance your understanding with multiple-choice questions. Each question provides detailed explanations to help you grasp the legal intricacies of life insurance.

Multiple Choice

The American rule regarding multiple assignees of the same insurance policy states which of the following?

Explanation:
When multiple people claim rights to the same life insurance policy due to assignments, the American rule decides who gets the proceeds by priority in time. The first valid assignment in time controls the rights to the death benefit. If that earliest assignment remains in effect at the insured’s death, the insurer pays to that assignee, and later assignments do not override it. This is why the correct choice reflects that only the first statement is true—the later assignment cannot prevail under this rule. The other statement would conflict with the principle of first-in-time priority.

When multiple people claim rights to the same life insurance policy due to assignments, the American rule decides who gets the proceeds by priority in time. The first valid assignment in time controls the rights to the death benefit. If that earliest assignment remains in effect at the insured’s death, the insurer pays to that assignee, and later assignments do not override it. This is why the correct choice reflects that only the first statement is true—the later assignment cannot prevail under this rule. The other statement would conflict with the principle of first-in-time priority.

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