New Jersey Life Producer Practice Exam

What percentage of a life insurance policy's proceeds can be paid to a minor when a legal guardian has been appointed?

1. 25%

2. 50%

3. 75%

4. 100%

The correct answer is: 50%

In life insurance policies, when the beneficiary is a minor, the proceeds are typically managed by a legal guardian or custodian until the minor reaches a certain age. Under New Jersey law, if a legal guardian has been appointed for a minor, the guardian can receive and manage 100% of the proceeds of the life insurance policy on behalf of the minor. This arrangement ensures that the minor's financial needs are adequately taken care of until they are of legal age to receive the funds themselves. Thus, the percentage of a life insurance policy's proceeds that can be paid to a minor, given that a legal guardian has been appointed, is indeed 100%. This means all proceeds are directed to the guardian, who has the responsibility to act in the best interest of the minor beneficiary.