Which statement about minor beneficiaries is NOT true?

• A. A minor cannot give the insurance company a binding release.
• B. A guardian will have to be appointed to facilitate receipt of the death proceeds.
• C. A minor cannot give release to change an irrevocable beneficiary designation.
• D. Interest only is paid for one year until the minor beneficiary reaches the age of majority.

Answer: (D)

When a beneficiary is a minor, the insurer cannot simply hand a large sum to the child. Proceeds are typically paid to a guardian or placed in a trust to protect the minor's interests, so a responsible adult handles receipt and management.

A minor cannot sign a binding release on the policy, so the insurer requires a guardian or court-appointed custodian to release the proceeds to the rightful recipient or to manage the payout.

An irrevocable beneficiary designation cannot be changed by the insured without the beneficiary’s consent—and since a minor is the beneficiary, a guardian or the beneficiary themselves (when capable) governs rights related to that designation. The minor cannot by releasing rights alter an irrevocable designation.

The statement that only interest would be paid for one year until the minor reaches majority is not a standard rule. In practice, the insurer may pay the proceeds to a guardian, set up a trust, or offer various settlement options; there isn’t a universal requirement that only interest is paid for a year.