Who can be a beneficiary of a life insurance policy?

The correct answer is that any person named by the policyowner can be a beneficiary of a life insurance policy. This flexibility allows policyowners to designate individuals, organizations, or even trusts as beneficiaries, reflecting their personal or financial circumstances.

This means that individuals can choose anyone they trust, which may include family members, friends, business partners, or charitable organizations. This aspect of life insurance gives policyholders the freedom to ensure that the death benefit goes to the person or entity they wish to support financially after their passing.

Other choices, such as designating only the insured person, family members, or corporate entities exclusively, are restrictive and do not represent the broader possibilities that life insurance policies provide regarding beneficiary designations. In practice, the policyowner has the authority to allocate benefits according to their wishes, and the insurance company will pay out the proceeds to the named beneficiary upon the insured's death, ensuring that the intent of the policyowner is fulfilled.