Which statement about the life insurance policies of a decedent-insured is correct?

• A. When the insured and the beneficiary die in the same accident, the proceeds must be divided equally to the estates.
• B. An insurance company always requires a copy of the insured's death certificate prior to distributing proceeds to a beneficiary.
• C. The majority of beneficiaries prefer to receive the proceeds through a settlement option rather than a lump sum.
• D. Insurance companies usually investigate death claims more thoroughly when the insured dies during the contestable period.

Answer: (B)

Proof of death is required before life insurance proceeds are released. The death certificate is the standard official document that confirms the insured has died and provides the essential details (date of death, identity, and eligibility to claim). This verification protects against paying a claim on someone who isn’t actually deceased and ensures the funds go to the rightful beneficiary or estate as designated by the policy. Because this documentation is the typical and essential trigger for claim payment, the statement that an insurance company always requires a death certificate prior to distributing proceeds best captures the standard process.

Other statements don’t fit the general practice. Dividing proceeds equally to estates when the insured and beneficiary die in the same accident isn’t a universal rule and depends on policy provisions and designation. The idea that beneficiaries prefer settlement options over a lump sum is about preferences, not a requirement or standard practice. And while insurers may investigate death claims more thoroughly during the contestable period, the key, default requirement before payout remains the death certificate.