Connecticut · Accident & Health SampleInteractive Mind Map
Beneficiary Designations
A visual breakdown of Beneficiary Designations — one of the concepts you can count on seeing on the exam.
The TESTivity Interactive Mind Mapping Graphic we picked for the Connecticut Health Insurance sample is Beneficiary Designations — and this is a concept you can count on seeing on your pre-licensing exam. Get the structure straight once and those questions turn into free points.
So explore it. Click through, see how the pieces relate, and let the layout do some of the remembering for you.
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The beneficiary designation answers one question: who gets the money?
Beneficiaries line up in levels — primary first, contingent as backup, tertiary as a third tier. If nobody named survives, the proceeds fall to the estate and into probate.
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The Order of Beneficiaries
First in line, backup, and third tier
1
Primary Beneficiary
First in line. If living at the insured’s death, receives the full proceeds. Multiple primaries can each take a stated percentage.
2
Contingent (Secondary) Beneficiary
The backup. Receives proceeds only if all primaries predecease the insured (or die together in a common accident).
3
Tertiary Beneficiary
A third-level backup if both primary and contingent are gone. Less common, but available in some policies.
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When No Named Beneficiary Survives
The estate — and probate — step in
Exam TipIf the primary predeceases the insured and there’s no contingent named, proceeds go to the policyowner’s estate and through probate — slower, public, and exposed to creditors. That’s exactly why naming a contingent is always recommended.
Can the owner change the beneficiary freely, or is consent required?
A revocable beneficiary can be changed anytime — the default. An irrevocable beneficiary has a vested interest: the owner can’t change them, take a loan, or surrender the policy without written consent.
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Revocable vs. Irrevocable
Who controls the designation
✅ Revocable (default)
Owner can change anytime without the beneficiary’s consent.
Beneficiary has no vested right during the insured’s lifetime.
The usual designation in most policies.
🔒 Irrevocable
Owner cannot change the beneficiary without their written consent.
Consent also needed to take a loan or surrender the policy.
Beneficiary has a vested ownership interest.
Frequently testedOnce named irrevocably, the beneficiary must consent to ANY significant change — changing the beneficiary, borrowing, or surrendering. An agent’s consent can’t substitute. And divorce does not automatically remove an irrevocable beneficiary.
How you describe the beneficiary — by name or by group — changes how proceeds are paid.
A class designation names a relationship (“my children”); minors can’t directly receive proceeds; and a trust solves both flexibility and minor-beneficiary problems.
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Individual vs. Class Designation
A named person or a described group
👤 Individual
A specific named person — “Jane Smith, wife of the insured.”
👪 Class
A group by relationship — “children of the insured.” Split equally among class members living at death.
Automatically includes future children — but risky if no class member survives.
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Minors & Trusts
Why you don’t name a young child directly
Minors lack legal capacity to manage proceeds — a court may hold the money via guardianship until majority
Name a trust: the trustee manages proceeds for the child per the trust terms
Name the surviving parent, with a contingent path to a guardian or trust
UTMA: some states allow proceeds to a custodian named in the designation
How they test thisProceeds paid to a trust avoid probate and let the trustee control distributions — the clean fix for a minor beneficiary or for spendthrift / multi-generational planning.
If a beneficiary dies before the insured, does their share pass down or spread sideways? Per stirpes sends the share down to that beneficiary’s descendants. Per capita spreads it across the surviving named beneficiaries only.
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Per Stirpes vs. Per Capita
By the branch vs. by the head
🌲 Per Stirpes — “by the branch”
A deceased beneficiary’s share passes down to their descendants.
3 children, one predeceases leaving 2 kids → those 2 grandkids split that child’s share.
👤 Per Capita — “by the head”
Only surviving named beneficiaries share equally.
A deceased beneficiary’s descendants get nothing.
Worked example — per stirpes, 3 children, one predeceased leaving 2 grandchildren:
Each child’s share = 1/3. The deceased child’s 1/3 passes to the 2 grandchildren → each grandchild gets 1/6. The 2 surviving children each get 1/3.
Memory aidPer stirpes = stems / branches — the family tree goes down. Per capita = by the head — only living heads share, no pass-down.
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Top Exam Tips — Beneficiary Designations
1. Order: primary → contingent (secondary) → tertiary. Contingent receives only if all primaries predecease the insured. 2. No surviving named beneficiary → proceeds go to the estate and through probate. Always name a contingent. 3. Revocable = change anytime (default). Irrevocable = written consent needed to change, borrow, or surrender; divorce doesn’t auto-remove. 4. Class designation (“my children”) auto-includes future children; splits equally among living members. 5. Minors can’t directly receive proceeds — use a trust, the surviving parent, or UTMA. 6. Per stirpes = share passes DOWN to descendants (by the branch); per capita = only survivors share (by the head).
Exam vocabulary
Key Terms to Know
Primary Beneficiary
First entitled to the death benefit; receives proceeds if living at the insured's death.
Contingent Beneficiary
The backup; receives proceeds only if all primary beneficiaries predecease the insured.
Tertiary Beneficiary
A third-level beneficiary who receives proceeds if both primary and contingent beneficiaries are deceased.
Revocable Beneficiary
A beneficiary the policyowner can change at any time without consent; no vested interest during the insured's lifetime.
Irrevocable Beneficiary
A beneficiary who cannot be changed and whose written consent is required for any change, loan, or surrender.
Class Designation
A beneficiary named by relationship (e.g., 'children of the insured') rather than by individual name; auto-includes future members.
Trust as Beneficiary
Naming a trust so a trustee manages proceeds per the trust terms; avoids probate and handles minors or special planning.
Per Stirpes
Distribution 'by the branch' — a deceased beneficiary's share passes down to their descendants.
Per Capita
Distribution 'by the head' — only surviving named beneficiaries share equally; no pass-down to descendants.
UTMA
Uniform Transfers to Minors Act; allows proceeds to be paid to a custodian for a minor in some states.
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