Question

question # 21: sarah and jean - paul are divorced and have had an acrimonious relationship ever since. sarah is often late with child and spousal support payments and is six months behind in payments when she is killed in a car crash. jean - paul is suing her estate for the support that he is owed. what course of action will the insurance company take, with regards to payment of the insurance benefits from sarahs life insurance policy which has her estate as the beneficiary?
a) the insurance company will pay the benefits to the court until the case is settled.
b) the insurance company will pay the benefits to the estate less the amount owed to jean - paul.
c) the insurance company will pay the benefits directly to the estate, and let the courts decide who receives the benefits.
d) the insurance company will not pay any benefits until the court case is settled.
your answer
× the insurance company will pay the benefits directly to the estate, and let the courts decide who receives the benefits.
rationale: it is possible for a creditor to make a claim under specific situations. a court order may allow an individual to claim the insurance benefit, for example where money is owed for spousal or child support. the insurer must take care that any benefits payable are made to the estate or to the beneficiary or beneficiaries. in the event of a dispute, the insurer may pay the benefit into court. the insurance company will pay the benefits into the court until the lawsuit is settled. in this case, the insurance company will pay the benefits to the court, until the lawsuit is settled.

Explanation:

The rationale explains that in a dispute (like Jean - Paul suing Sarah's estate for owed support), the insurance company pays benefits to the court until the case is settled. Option a matches this. Option b is incorrect as the company doesn't deduct the owed amount from the estate. Option c is wrong because the company doesn't pay directly to the estate and let courts decide later; instead, it pays to the court during the dispute. Option d is incorrect as the company does pay (to the court) during the settlement process.

Answer:

a) The insurance company will pay the benefits to the court until the case is settled.