Bob is the sole shareowner of a small warehousing firm. Recently, one of his employees was
seriously injured at work when scaffolding collapsed. Bob is being sued by the employee’s family
for millions of dollars, which would deplete all Bob’s business and personal ass
ets. Bob changes
the beneficiary of his segregated fund contract from himself to his father.
Has Bob achieved creditor protection of his investment?
Yes, because his father is a preferred beneficiary and he is protected from creditor claims.
b) Yes, because his father is a preferred beneficiary and the policy is protected against
c) Not necessarily, since naming his father as beneficiary may have been done to defeat
d) No, since Bob cannot change the beneficiary of a segregated fund contract after it has
Correct answer: c)
Mary has a life insurance policy in which she is the policyholder and also the life insured. She has
had the same agent for many years, John. The beneficiary of the policy is Mary’s friend, Edith.
When Mary dies and the insurer receives the notice of death from the executor, what will be the