State RegulationsAZ specificDifficulty 2/5
A Chandler resident named her adult daughter as beneficiary of her accident and health policy; she has two other living children. When the insurer receives a due claim, under A.R.S. 20-1353 how is the payment directed?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under A.R.S. 20-1353, proceeds are payable according to the beneficiary designation; the estate and the equitable-relative payment rules are fallbacks used only when there is no designation or when the payee is a minor or incompetent. A valid, existing designation channels the entire payment to the named beneficiary — here, the adult daughter alone.
Why the other options are wrong
- B) The equitable-relative payment rule is a fallback for minors and incompetents, not a method for splitting proceeds among all blood relatives when a valid designation exists.
- C) The estate receives payment only when no beneficiary designation exists; a valid designation to the daughter excludes the estate.
- D) A.R.S. 20-1353 contains no split-payment formula; the designation controls, and the estate receives nothing while the designation stands.
Memory hook
The designation speaks first; estate and relatives are only backups.