Legal Aspect Of Life Insurance Practice Test

Per stirpes is the idea that a deceased beneficiary’s share passes to that beneficiary’s descendants, rather than being redistributed among the remaining surviving beneficiaries. This preserves the beneficiary’s line down the family tree. In this scenario, one of the named primary beneficiaries predeceased the insured and left two children, Ralph and Marie. Under a per stirpes provision, the deceased beneficiary’s share is split equally among their descendants. Since Ira’s line has two children, Ralph and Marie, each receives half of Ira’s share. If Ira’s share would have been 50% of the proceeds, Ralph and Marie would each get 25% of the total. That’s why Marie would receive 25% under per stirpes. If another method were used (for example, per capita, or a clause that moves shares to the insured’s estate or under a New York Rule framework), the specific distribution would differ and Marie might not receive that 25%. The essence of per stirpes here is keeping Ira’s line intact and distributing Ira’s portion to his descendants, which results in Marie getting a 25% share.