PSI Life Exam Practice Test

What term describes naming a contingent beneficiary as "all of my children"?

1. Class designation

2. Specific designation

3. Alternate designation

4. Legal designation

The correct answer is: Class designation

The term that refers to naming a contingent beneficiary as "all of my children" is class designation. This term is used in life insurance and estate planning contexts to indicate that a group or class of individuals, instead of specific individuals, is intended to be the beneficiary. By specifying "all of my children," the policyholder includes any and all children, regardless of how many there are or whether any are born after the policy is created. This approach simplifies the process of naming beneficiaries and ensures that all eligible members of a defined group are covered without needing to list each individual by name. In contrast, specific designation refers to naming particular individuals individually, while alternate designation pertains to naming a backup beneficiary if the primary one cannot collect the benefit. Legal designation often pertains to terms defined under the law rather than in policy documents, making class designation the most accurate term in this context.