The Role of the Beneficiary 受益人的角色
A beneficiary is the person named by the policy owner to receive the death benefit when the life insured dies. The policy owner, the life insured and the beneficiary need not be the same person, so identify each one first when answering a question. A beneficiary is normally concerned only with the death benefit; surrender values and maturity proceeds usually belong to the policy owner.
Insurable interest is judged at inception, by reference to the relationship between the proposer and the life insured. The beneficiary does not need an insurable interest in the life insured, so a friend or relative can be named.
The practical advantage of naming a beneficiary is that the insurer can pay that person directly once a valid claim is documented, without the money passing through the distribution of an estate. If no beneficiary is named and the policy owner is also the life insured, the proceeds fall into the owner's estate. If the owner is a different person who is still alive, the proceeds are generally paid to the owner.
Primary and Contingent Beneficiaries 第一受益人與後備受益人
The primary beneficiary has first call on the proceeds when the life insured dies. A contingent beneficiary is entitled only if every primary beneficiary has died or otherwise cannot take the benefit. Where several beneficiaries are named, the policy owner can state the share each is to receive.
A beneficiary who dies before the life insured cannot take the proceeds, and unless the policy says otherwise the money does not pass into that beneficiary's estate. Entitlement moves to the next beneficiary in the stated order. If no beneficiary survives, the proceeds go to the policy owner or the owner's estate, as described in the previous topic.
No one may profit from their own wrongdoing. A beneficiary who unlawfully kills the life insured cannot receive the proceeds, although this does not necessarily make the policy itself invalid.
Revocable and Irrevocable Beneficiaries 可撤銷與不可撤銷受益人
A revocable designation can be changed by the policy owner under the procedure in the policy, usually by written notice to the insurer, without the beneficiary's consent. Until the life insured dies, such a beneficiary has only an expectation of receiving the proceeds and no vested right. The owner remains free to surrender the policy, take a policy loan or assign it.
An irrevocable beneficiary has a vested right. Without that person's consent, the policy owner cannot change the designation or do anything that would prejudice the right, such as surrendering the policy, taking a policy loan or making an absolute assignment. Paying premiums does not prejudice the right and needs no consent.
The usual exam point is whether the owner keeps control of the policy. An irrevocable designation significantly restricts that control, so its consequences should be made clear before it is chosen.
The Statutory Trust in Hong Kong 香港的法定信託
Under section 13 of the Married Persons Status Ordinance (Cap. 182), a policy that a person effects on their own life and expresses to be for the benefit of their spouse or children creates a trust in favour of those persons.
While the objects of the trust remain unperformed, the proceeds do not form part of the insured person's estate and are not subject to that person's debts. This matters particularly to the family of someone in debt; by contrast, proceeds that fall into an estate are generally available to meet the estate's debts.
There is an exception to this protection. If it is proved that the policy was effected and the premiums paid with intent to defraud creditors, the creditors may recover from the proceeds a sum equal to the premiums paid. The rule also applies only to a policy on the person's own life for a spouse or children; simply naming a sibling, friend or business partner as beneficiary does not create a trust under this rule.
Practice
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