Jones owned an insurance policy on her life, on which she paid all the premiums.  Smith was named the beneficiary. Jones died and the insurance company refused to pay the insurance proceeds to Smith.  An action by Smith against the insurance company for the insurance proceeds will be
A. Unsuccessful because Smith did not pay any of the premiums.
B. Successful because Smith is a third-party donee beneficiary.
C. Unsuccessful because Smith was not the owner of the policy.
D. Successful because Smith is a proper assignee of Jones’ rights under the insurance policy.
Answer:B
B is corrent. The beneficiary of a life insurance contract is an intended third-party donee beneficiary, and as such, can maintain an action against the insurance company in the event of default. In this case Smith, as the third-party donee beneficiary, will be successful in an action against the insurance company.
A is incorrect. The beneficiary of a life insurance contract is an intended third-party donee beneficiary, and as such, can maintain an action against the insurance company in the event of default. In this case Smith, as the third-party donee beneficiary, will be successful in an action against the insurance company.
C is incorrect.  The beneficiary of a life insurance contract is an intended third-party donee beneficiary, and as such, can maintain an action against the insurance company in the event of default. In this case Smith, as the third-party donee beneficiary, will be successful in an action against the insurance company.
D is incorrect. Smith is not an assignee of Jones’ rights under the insurance policy. S/he is a third-party beneficiary and no assignment of Jones’ rights has occurred.