New Jersey Life Producer Practice Exam

Beneficiaries of last resort refer to individuals designated to receive benefits from a life insurance policy in the event that all primary beneficiaries are deceased or otherwise unable to claim the benefits. This ensures that the insurance proceeds will go to someone rather than remaining unclaimed. This type of designation is critical because it provides a clear plan for distribution of benefits, allowing the insured to express their wishes for who should receive the funds if the primary beneficiaries do not survive the insured. This level of careful planning in the naming of beneficiaries helps avoid potential legal complexities or disputes regarding the distribution of benefits following the insured's death.

In other contexts, secondary beneficiaries may indeed be seen as beneficiaries to receive funds under specific circumstances, but they are not generally referred to as "beneficiaries of last resort." The insurance agents and individuals without ties to the insured do not play roles relevant to the distribution of benefits in this context.