Regarding the reverse common-disaster clause, which statement is true?

Regarding the reverse common-disaster clause, which statement is true?

• A. I only
• B. II only
• C. Both I and II
• D. Neither I nor II

Answer: (A)

A reverse common-disaster clause flips the usual assumption about the order of deaths when both the insured and the named beneficiary die in the same disaster. Its purpose is to resolve who is considered to have died first for purposes of the death benefit payout. With this clause, if a simultaneous-death scenario occurs, the presumption is that the beneficiary died before the insured (the opposite of the standard clause). As a result, the death benefit is treated as if the insured outlived the beneficiary, which typically means the proceeds go to the insured’s estate or to other contingent beneficiaries rather than to the named beneficiary. So the true statement is the one that correctly describes this reversal of the death-order presumption and its consequences for who receives the payout. The other statements would be incorrect if they describe the standard presumption or misstate how the reverse clause operates.

A reverse common-disaster clause flips the usual assumption about the order of deaths when both the insured and the named beneficiary die in the same disaster. Its purpose is to resolve who is considered to have died first for purposes of the death benefit payout.

With this clause, if a simultaneous-death scenario occurs, the presumption is that the beneficiary died before the insured (the opposite of the standard clause). As a result, the death benefit is treated as if the insured outlived the beneficiary, which typically means the proceeds go to the insured’s estate or to other contingent beneficiaries rather than to the named beneficiary.

So the true statement is the one that correctly describes this reversal of the death-order presumption and its consequences for who receives the payout. The other statements would be incorrect if they describe the standard presumption or misstate how the reverse clause operates.