Pico Simons has a life insurance policy on his own life with Assurance Life Insurance. In...

Pico Simons has a life insurance policy on his own life with Assurance Life Insurance. In the event of his death, his sister Amber will receive all of the proceeds. Which of the follow is true?

Select one:

a. Assurance Life is the promisor, Pico is the promisee and Amber is the third-party donee beneficiary.

b. Pico is the delegor, Assurance Life is the delegee, and Amber is the obligee

c. Pico is the promisor, Assurance Life is the promisee and Amber is an incidental beneficiary.

d. Pico is the assignor, Amber is the assignee and Assurance Life is the obligor.

Expert Solution

Answer: A) Assurance Life is the promisor, Pico is the promisee and Amber is the third-party donee beneficiary.

Promisor: The promisor is the party who makes the promise to another party. The party who has the"duty to perform." In an insurance contract, the promisor is always an insurance company.

Promisee: The party to whom the promisor makes the promise is called Promisee. The applicant in an insurance policy is a Promisee.

Third-party Beneficiary: Sometimes a contract benefits a party who is not a part of the agreement. These are called third-party beneficiaries who receive benefits of a contract, while not involved in any obligation.

In the above question, we can easily identify that Assurance Life Insurance is a promisor that makes a promise to Pico Simons who is a promisee here. Also, Pico's sister Amber receives the benefits out of this contract acts as a third-party beneficiary. Hence the answer is option A.

Delegator, delegee, and obligee are the terms used in a delegation contract whereas assignor, assignee, and obligor are the terms used in an assignment contract. Hence B and D can not be the right answer.

keosha answered 2 years ago

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