Clarence, the insured, designated his estate as the beneficiary of his life insurance policy. Which of the following statements is CORRECT?
A) The amount of Clarence's estate will be reduced by the amount of proceeds it receives.
B) The proceeds will not be included in Clarence's gross estate for estate tax purposes.
C) Clarence's creditors can make claims against the proceeds more readily than if the proceeds were paid to named beneficiaries.
D) The heirs will be able to select specific settlement options from the estate, just as if they were the direct beneficiaries."
Ans: C) Clarence's creditors can make claims against the proceeds more readily than if the proceeds were paid to named beneficiaries.
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