Tennessee Insurance Practice Exam 2025 – All-in-One Resource for Exam Success!

In a Key Employee life insurance policy, the typical beneficiary is the employer, which in this context is represented by ABC Incorporated. This type of policy is designed to protect the business against the loss of a key individual whose contributions are crucial to the organization's success and profitability. If the key employee passes away, the insurance payout goes directly to the company, enabling it to manage the financial impact of the loss. This fund can be used for various purposes, such as recruiting and training a replacement or covering lost revenue due to the employee's absence.

Other potential beneficiaries, such as the employee's estate or family, are not usual choices in this kind of policy because the primary aim is to safeguard the business rather than address personal or familial financial needs. The insurance company's role is more about providing the policy and coverage, rather than being a beneficiary of the policy itself.