Massachusetts Life Insurance Practice Exam 2025 – Complete Study Guide

The term that describes the distribution method where benefits are paid to the heirs of a deceased beneficiary is "Per Stirpes." This method ensures that if a beneficiary passes away before the policyholder, their share of the benefits will be distributed to their own heirs, or descendants, rather than being reallocated among the surviving beneficiaries.

For example, if the deceased beneficiary had children, those children would receive the deceased parent's portion, preserving the lineage of inheritance. This approach ensures that a beneficiary's family continues to receive their intended benefits, providing greater financial support within families across generations.

In contrast, "Per Capita" distributes benefits equally among surviving beneficiaries and does not account for deceased beneficiaries' heirs. "Primary Benefits" generally refers to the main benefit amount designated to be paid under a policy, rather than a distribution methodology. "Joint Benefits" typically involve shared policies for multiple insured parties rather than focusing on the distribution of benefits after someone's passing. Each of these terms operates under different principles than what "Per Stirpes" specifies in relation to deceased beneficiaries and their heirs.